When David Bowie raised $55 million by securitizing royalties from his again catalog in 1997, the idea was handled as a curiosity.
Almost three a long time on, credit standing company KBRA says in a new report that it has rated greater than $12.9 billion in music royalty bonds since 2020 alone – a determine that has greater than tripled from simply over $4 billion as lately as 2023.
However KBRA says issuance is about to contract.
KBRA expects music ABS issuance to fall by roughly 25% in 2026, dropping from over $3.3 billion in every of the previous two years to barely greater than $2.5 billion – “primarily due to continued issuer consolidation.”
The company has now assigned 81 rankings on music royalty ABS throughout 18 issuers since 2020, it stated within the report, titled Playback: Issuance, Business and Efficiency Traits in Music ABS, revealed on Thursday (Could 14).
KBRA famous that consolidation “could have blended implications for music ABS, doubtlessly enhancing collateral diversification and servicing scale whereas decreasing issuance exercise if acquired catalogs migrate to investment-grade platforms.”
The forecast comes amid a wave of business consolidation involving corporations who’ve been lively within the music ABS area:
In keeping with the KBRA report, 4 of its rated music royalty ABS transactions have concerned “issuer acquisitions, supervisor transitions, or publicly reported potential acquisitions” for the reason that starting of 2025 – “representing the best stage of such exercise for the reason that asset class reemerged in 2020.”
Regardless of the anticipated dip in issuance volumes, the KBRA report famous that the sector’s issuer base has expanded.
The variety of distinctive issuers within the sector has doubled from 9 in 2023 to 18 as of 2026, the company famous – “offering a stronger basis for long-term sector stability.”
“Though annual issuance volumes have remained considerably risky, the sector has demonstrated rising consistency as a broader issuer base has decreased reliance on a small variety of repeat issuers and supported a steadier transaction pipeline,” KBRA stated.
Debt service protection ratios (DSCRs) throughout the sector “have remained comparatively steady, though pockets of underperformance spotlight sure transaction- and catalog-specific dangers,” the company added.
On common, DSCRs have “trended decrease, primarily due to refinancing phrases and decrease DSCRs at issuance,” in response to the report.
Throughout the 81 rankings KBRA has assigned within the music ABS asset class, rankings “have typically remained steady,” the company stated, including that it “expects continued ranking stability throughout the sector.”
The Playback report is KBRA‘s fourth devoted publication on the music ABS sector, following The Beat Goes On (2023), Sound Verify (2025), and Observe Cut up (2025).
These experiences have charted the sector’s development in actual time: KBRA reported 38 rankings throughout 9 issuers totaling over $4 billion in 2023; 64 rankings throughout 15 issuers totaling roughly $8 billion by Could 2025; and 76 rankings throughout 15 issuers totaling roughly $11.5 billion by October 2025.
The music ABS market has attracted a wave of latest entrants lately, with offers from Chord Music Companions, Seeker Music Group, Affect Media Companions, Duetti, and HarbourView becoming a member of established issuers similar to Harmony and Sony-bound Recognition Music Group (previously Hipgnosis).
In April, a brand new issuing automobile linked to UMG-backed Chord Music Companions priced $500 million in debt by way of an ABS transaction backed by an $830 million catalog.
In March, Seeker Music Group closed a $267 million ABS – its first – backed by a portfolio of greater than 19,000 copyrights and grasp recordings.Music Enterprise Worldwide
