Harmony has efficiently closed its newest asset-backed securities transaction to “gasoline continued development” on the impartial music firm.
In keeping with an announcement launched on Tuesday (July 22), Harmony is issuing $1.765 billion in bonds by way of a collection of recent 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 corresponding 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 up to now”.
The corporate stated on Tuesday (July 22) that the transaction was greater than 3 times oversubscribed, reflecting what it referred to 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 rankings businesses, 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 fashioned an investor syndicate led by Apollo-managed funds and associates.
Proceeds from the issuance shall be used to repay the corporate’s $1.65 billion 2022-1 be aware collection and refinance and prolong its $100 million variable funding be aware.
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 appearing as trustee.
Virtu World Advisors, LLC supplied valuation providers, whereas DLA Piper supplied authorized counsel for Harmony and Milbank LLP for Apollo associates.
“ABS transactions just like the one we simply closed will stay an important a part of our development technique, permitting us to proceed to decrease our price of capital whereas increasing our world capabilities in help of the artists and songwriters we serve.”
Bob Valentine, Harmony
Bob Valentine, CEO of Harmony, stated: “As Harmony continues to develop each our catalog and frontline roster, guaranteeing long-term entry to institutional capital and persevering with to construct upon our sturdy monetary basis are essential.
“ABS transactions just like the one we simply closed will stay an important a part of our development technique, permitting us to proceed to decrease our price of capital whereas increasing our world capabilities in help of the artists and songwriters we serve.
“I’m extremely grateful to the Apollo workforce, who proceed to supply custom-made options in order that Harmony can dwell 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 return.”
Michael Paniwozik, Apollo
Apollo Companion Michael Paniwozik, stated: “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 return.”
“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, stated: “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 workforce have made great progress advancing the corporate’s development technique by a number of additive acquisitions.
“We imagine the 4 transactions that we’ve executed with Harmony up to now mirror the differentiated nature of Apollo’s built-in platform, bringing collectively mixed capabilities of Apollo, ATLAS SP, and Redding Ridge to supply 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 celebrity 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 house, quickly gaining recognition over the previous a number of years.
Blackstone-owned Hipgnosis closed a $1.47-billion ABS transaction final fall, which the corporate stated can be used to “repay present debt in full and help future acquisitions.”
Different latest ABS offers within the music rights world embody 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
