Harmony has efficiently closed its newest asset-backed securities transaction to “gas continued development” on the unbiased music firm.
Based on an announcement launched on Tuesday (July 22), Harmony is issuing $1.765 billion in bonds by way of a collection of latest five-year, seven-year, and ten-year senior notes.
The bonds are backed by Harmony’s catalog of over 1.3 million music copyrights. Harmony’s portfolio of music rights options songs and recordings of artists equivalent to The Beatles, Beyonce, Bruno Mars, Carrie Underwood, Creedence Clearwater Revival, Daddy Yankee, Ed Sheeran, Genesis, Think about Dragons, John Fogerty, Kiss, Michael Jackson, Otis Redding, Phil Collins, Pink Floyd, R.E.M., Rihanna, Rodgers & Hammerstein, Taylor Swift, and The Rolling Stones.
The most recent bond issuance represents Harmony’s fourth securitization providing and is claimed to be “the most important and longest tenured asset-backed time period securitization of music rights to this point”.
The corporate mentioned on Tuesday (July 22) that the transaction was greater than 3 times oversubscribed, reflecting what it known as “sturdy investor demand underpinning Harmony’s ABS technique”.
As reported by MBW earlier this month, the music rights portfolio backing the bonds is valued at greater than $5.1 billion. The notes have been rated A+ and A2, respectively, by scores companies, KBRA and Moody’s.
Apollo, by its Capital Options enterprise and associates ATLAS SP Companions and Redding Ridge Asset Administration, structured the ABS transaction and shaped an investor syndicate led by Apollo-managed funds and associates.
Proceeds from the issuance will probably be used to repay the corporate’s $1.65 billion 2022-1 notice collection and refinance and lengthen its $100 million variable funding notice.
Apollo World Securities, LLC and ATLAS SP Securities acted as joint bookrunners for the transaction. Redding Ridge Asset Administration served as structuring agent, with the Financial institution of New York Mellon performing as trustee.
Virtu World Advisors, LLC offered valuation companies, whereas DLA Piper offered authorized counsel for Harmony and Milbank LLP for Apollo associates.
“ABS transactions just like the one we simply closed will stay a significant a part of our development technique, permitting us to proceed to decrease our price of capital whereas increasing our international capabilities in help of the artists and songwriters we serve.”
Bob Valentine, Harmony
Bob Valentine, CEO of Harmony, mentioned: “As Harmony continues to develop each our catalog and frontline roster, making certain long-term entry to institutional capital and persevering with to construct upon our robust monetary basis are essential.
“ABS transactions just like the one we simply closed will stay a significant a part of our development technique, permitting us to proceed to decrease our price of capital whereas increasing our international capabilities in help of the artists and songwriters we serve.
“I’m extremely grateful to the Apollo crew, who proceed to offer personalized options in order that Harmony can reside out its mission to raise the voices of artists around the globe.”
“We proceed to be impressed by the standard and breadth of the actively managed catalog that Harmony has constructed and sit up for supporting its journey for years to come back.”
Michael Paniwozik, Apollo
Apollo Accomplice Michael Paniwozik, mentioned: “We’re happy to construction and lead this landmark ABS transaction for Harmony, which represents a continuation of our long-term financing partnership and demonstrates Harmony’s progressive method to music securitization by the issuance of the trade’s first 10-year tranche.
“We proceed to be impressed by the standard and breadth of the actively managed catalog that Harmony has constructed and sit up for supporting its journey for years to come back.”
“It has been immensely rewarding to help Harmony’s continued evolution leveraging the ABS construction that we established in 2022.”
Paul Sipio, Apollo
Apollo Managing Director Paul Sipio, mentioned: “It has been immensely rewarding to help Harmony’s continued evolution leveraging the ABS construction that we established in 2022.
“Since that point, Bob and crew have made large progress advancing the corporate’s development technique by a number of additive acquisitions.
“We imagine the 4 transactions that we’ve executed with Harmony to this point replicate the differentiated nature of Apollo’s built-in platform, bringing collectively mixed capabilities of Apollo, ATLAS SP, and Redding Ridge to offer tailor-made structured options.”
Harmony’s newest ABS transaction follows an $850-million issuance in October final yr (five-year notes maturing in October 2029), a part of which was used to purchase a $217 million catalog from Latin music famous person Daddy Yankee.
Whereas asset-backed securities (ABS) have lengthy been part of the monetary world, they’re a comparatively new arrival within the music rights area, quickly gaining reputation over the previous a number of years.
Blackstone-owned Hipgnosis closed a $1.47-billion ABS transaction final fall, which the corporate mentioned could be used to “repay current debt in full and help future acquisitions.”
Different current ABS offers within the music rights world embrace a $500 million issuance to funding big KKR by HarbourView final month; a $360 million issuance by Affect Media Companions this previous January; a $266.5 million issuance by Kobalt in March of final yr; and an $80 million issuance by indie music rights-focused Duetti final October.Music Enterprise Worldwide
