<SEC-DOCUMENT>0001193125-23-255311.txt : 20231213
<SEC-HEADER>0001193125-23-255311.hdr.sgml : 20231213
<ACCEPTANCE-DATETIME>20231012214155
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-23-255311
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20231012

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Apollo Commercial Real Estate Finance, Inc.
		CENTRAL INDEX KEY:			0001467760
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				270467113
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		C/O APOLLO GLOBAL MANAGEMENT, LLC
		STREET 2:		9 WEST 57TH STREET, 43RD FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10019
		BUSINESS PHONE:		(212) 515-3200

	MAIL ADDRESS:	
		STREET 1:		C/O APOLLO GLOBAL MANAGEMENT, LLC
		STREET 2:		9 WEST 57TH STREET, 43RD FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10019
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<TYPE>CORRESP
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<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">October&nbsp;12, 2023 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>VIA EDGAR </U></B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Eric McPhee </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Isaac Esquivel </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and Exchange Commission
</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Real Estate and
Construction </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Apollo Commercial Real Estate Finance, Inc. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:13%; font-size:10pt; font-family:Times New Roman"><B><FONT STYLE="white-space:nowrap">Form&nbsp;10-K</FONT> for the fiscal year ended December&nbsp;31, 2022 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:13%; font-size:10pt; font-family:Times New Roman"><B>Filed February&nbsp;8, 2023 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:13%; font-size:10pt; font-family:Times New Roman"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;001-34452</FONT> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Mr.&nbsp;McPhee and Mr.&nbsp;Esquivel: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On
behalf of Apollo Commercial Real Estate Finance, Inc., a Maryland corporation (the &#147;<B>Company</B>&#148;), set forth below are the responses of the Company to the comments of the staff of the Division of Corporation Finance (the
&#147;<B>Staff</B>&#148;) of the Securities and Exchange Commission (the &#147;<B>Commission</B>&#148;) by letter dated September&nbsp;29, 2023 (the &#147;<B>Comment Letter</B>&#148;) with respect to the Company&#146;s Form <FONT
STYLE="white-space:nowrap">10-K</FONT> for the year ended December&nbsp;31, 2022 (the &#147;<B>Form <FONT STYLE="white-space:nowrap">10-K</FONT></B>&#148;). </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s responses to the comments of the Staff contained in the Comment Letter are set out below in the order in which the comments
were set out in the Comment Letter and are numbered accordingly. Defined terms used herein but not otherwise defined have the meanings given to them in the Form <FONT STYLE="white-space:nowrap">10-K.</FONT> </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Item&#8201;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations Book Value Per Share, page 47 </U></B></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>1.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>We note your reconciliation of the changes in book value per share from December&nbsp;31, 2021 to
December&nbsp;31, 2022, and note the line item Earnings in excess of dividends appears to represent something other than Net income less Dividends declared during 2022. Please clarify what this line item represents. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B><U>Company Response</U>: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In response to the Staff&#146;s comment, the Company respectfully advises the Staff that the line item referenced in the Staff&#146;s comment,
&#147;Earnings in excess of dividends&#148; in the table on page 47, represents &#147;Diluted Distributable Earnings per share prior to realized gains (losses) and impairments on real estate owned and investments,&#148; as included in the first
table on page 47 of the Form <FONT STYLE="white-space:nowrap">10-K,</FONT> less dividends declared per share of common stock. In future filings, the Company will revise this line item to clarify what it refers to specifically and to separate the two
amounts rather than netting them. For example, in the Form <FONT STYLE="white-space:nowrap">10-K,</FONT> this line item as revised would be separated into two line items and read &#147;Diluted Distributable Earnings per share prior to realized gains
(losses) and impairments on real estate owned and investments&#148; and &#147;Dividends declared per share of common stock.&#148; </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Notwithstanding the foregoing, the Company has been considering eliminating this table in
future filings because the Company does not believe that this additional presentation of the information is material to investors. The Company already presents the earnings from ongoing operations in the first table on page 47 of the Form <FONT
STYLE="white-space:nowrap">10-K</FONT> and similarly discloses its dividends so that an investor is able to compare the Company&#146;s earnings from ongoing operations and its dividend. Additionally, since the Company discloses &#147;Book Value Per
Share&#148; in its filings quarterly, the Company believes that showing the periodic change in this table may not be meaningful to investors. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Item&#8201;8. Financial Statements and Supplementary Data </U></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Note 4 - Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net Risk Rating, page 69 </U></B></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>2.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>We note your disclosure that your risk ratings are based on a variety of factors, some of which are
discussed within this footnote. Please tell us what consideration you have given to expanding this discussion to include additional information about the factors that influence your ratings, including, but not limited to, <FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">loan-to-value</FONT></FONT> ratios and debt yields. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B><U>Company Response</U>: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In response to the Staff&#146;s comment, the Company respectfully advises the Staff that it believes that its disclosure relating to the
factors that are used in assigning risk ratings to its loans is appropriate since there is no set weighting or formula used from loan to loan. Instead, the Company considers a variety of factors, including, without limitation, loan to value ratio,
debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan and project sponsorship, none of which on its own (regardless of whether it is a
quantitative factor or qualitative factor) is indicative or prescriptive as to which specific risk rating will be assigned to a specific loan. The Company assesses and monitors these considerations holistically, focusing on their interplay, taken as
a whole, rather than starting the analysis with any <FONT STYLE="white-space:nowrap">pre-determined</FONT> base risk rating. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Moreover, the
Company believes that additional information relating to the application of the various factors in assigning a rating to a loan is confidential and proprietary in nature, and it would be unduly costly and burdensome to include a sufficiently
comprehensive list of scenarios to cover the application and weighting of the various factors in different situations. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">However, in
response to the Staff&#146;s comment, the Company will include additional language in future filings substantially to the effect &#147;The Company applies the different factors on a
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">case-by-case</FONT></FONT> basis depending on the facts and circumstances for each loan, and the different factors may be given different weightings in different situations.&#148;
</P>
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<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>* * * * * </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Should the Staff have additional questions or comments regarding any of the foregoing, please do not hesitate to contact the undersigned, at
(917) <FONT STYLE="white-space:nowrap">286-5908,</FONT> or Andrew Epstein of Clifford Chance US LLP, counsel to the Company, at (212) <FONT STYLE="white-space:nowrap">878-8332.</FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Sincerely, </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">/s/ Anastasia Mironova </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Anastasia Mironova </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Chief Financial Officer, Treasurer and
Secretary </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>Apollo Commercial Real Estate Finance, Inc.</I> </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Stuart Rothstein </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>Clifford
Chance US LLP </I></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Andrew Epstein </P>
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