Apollo Debt Solutions Doubles Credit Line for CLO-Backed Loan Acquisition Unit

The expansion allows Barn Owl Funding to scale its portfolio ahead of an expected debt securitization.

April 15, 2025

Apollo steps up its CLO ramp-up strategy

Apollo Debt Solutions BDC just gave its loan acquisition engine a major boost. On April 8, its subsidiary, Barn Owl Funding LLC, finalized a deal that doubles the capital it can draw under an existing credit agreement. That figure now sits at $320 million —up from $160 million. This expanded facility gives Barn Owl Funding more room to move as it ramps up a portfolio of first-lien corporate loans ahead of a planned collateralized loan obligation (CLO) transaction.

How the structure is set up

Here’s how it works: Barn Owl Funding, fully owned by Apollo Debt Solutions, was set up to acquire eligible loan assets either directly from Apollo or from the secondary market. These assets are then pooled to serve as collateral for a future securitization. The structure allows Apollo to manage the assets while also holding a residual interest through subordinated notes, keeping the company closely tied to the performance of the portfolio it’s assembling.

Why the amendment matters

The original agreement was signed on March 25, 2025. Less than two weeks later, the new amendment was in place—reflecting a clear intent to accelerate activity in the lead-up to the CLO pricing. An affiliate of the lender, Bank of America, is expected to arrange that securitization once the asset ramp-up is complete.

This isn’t just about access to capital—it’s about timing and scale. The expanded credit line allows Barn Owl Funding to act quickly, building out the portfolio under favorable market conditions and preparing for execution on the upcoming transaction. It’s a setup designed for speed and efficiency, with Apollo managing both the asset selection and the overall structure.

Positioning for execution

In today’s market, that kind of flexibility matters. The ability to fund, acquire, and securitize with minimal lag gives Apollo a way to stay aligned with investor demand and evolving credit trends. As the CLO market continues to attract attention, Apollo’s move to increase capacity signals confidence in the pipeline and readiness to act.