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Harmony has reportedly begun a course of that might see it turn into the most recent giant music firm to get into the monetary bonds recreation.
Monetary big Apollo World Administration is reportedly promoting a $1.65 billion bond backed by music rights from Harmony’s catalog, which might mark the music firm’s first securitization.
That’s in accordance with Bloomberg, citing folks with information of the matter, who stated that Apollo ‘has already secured an anchor order for a big chunk of the debt’.
The report provides that the deal ‘repackages royalty funds’ from each publishing and recorded music rights, ‘from a catalog of music by a number of singers and songwriters,’ together with Phil Collins, Genesis, Evanescence and R.E.M.
Bloomberg notes {that a} ‘spokesperson for Harmony stated the agency is contemplating promoting bonds, and directed additional inquiries to Apollo, a consultant for which declined to remark’.
Citing a presale report, Bloomberg says that Kroll Ranking Bond Company ‘is anticipated to charge Harmony’s securities and is about to assign them an A+ score’.
Right now’s information comes simply over 12 months MBW instructed you that monetary bonds have been about to turn into an enormous deal within the music enterprise.
That prediction got here true, time and time once more, over the previous yr, with quite a few headlines hitting our pages about music corporations launching bond choices by way of securitized royalties from copyrights.
In December 2021, for instance, non-public fairness firm Northleaf Capital introduced it was elevating $303.8 million by promoting Asset-Backed Securities (ABS) which are supported by music rights – together with songs created by Pete Townshend for The Who, and by nation star Tim McGraw.
In line with Bloomberg, the securities can be supported by each publishing and sound recording rights, in addition to different earnings streams, throughout a complete of 52,729 songs.
These songs make up a piece of the catalog of Spirit Music Group; Spirit owns a complete portfolio of greater than 100,000 music belongings.
Our prediction got here true once more in February, when MBW reported that within the second half of October 2021, KKR – by way of its Chord Music enterprise – acquired a big portfolio of rights from Kobalt for $1.1 billion and supposed to securitize that catalog into bonds.
In line with Bloomberg, KKR Credit score Advisors is utilizing a catalog of 65,000 songs – together with hits from The Weeknd, Stevie Nicks, and Infantile Gambino – to promote greater than $732 million of asset-backed securities supported by publishing and sound recording royalties.
Over the summer time, extra information from this world arrived, with a pre-sale report from Kroll Bond Ranking Company (KBRA), confirming that Hipgnosis was within the strategy of launching its personal music royalty-backed bond bundle – a $221.65 million securitized providing.
US music licensing/assortment society, SESAC additionally closed a $335 million bond transaction over the summer time. This providing was really a whole-business securitization, which Bloomberg likened in its report on the time to SESAC “successfully mortgaging” its firm.
In September, Harmony acquired the publishing and recorded music catalogs of Tony Banks, Phil Collins and Mike Rutherford, in addition to the publishing and recorded music catalog from their years within the band Genesis in a deal The Wall Avenue Journal reported to be ‘valued at over $300 million’.
The information adopted a string of current M&A exercise from Harmony, comparable to its buy of the belongings of HitCo Leisure and its eight-figure acquisition of Australia & New Zealand-based music writer, Native Tongue.
Harmony spent an estimated $1 billion on acquisitions throughout its first 14 years in enterprise. It then spent two nine-figure sums buying a majority stake in Pulse Music Group in 2020, and then the Think about Dragons publishing catalog, earlier than buying Downtown’s copyright portfolio for $400 million, in 2021.Music Enterprise Worldwide
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