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Warner Music raises $250 million in debt finance to fund catalogue acquisitions
By Chris Cooke | Published on Tuesday 20 October 2020
Warner Music yesterday confirmed that it is raising $250 million in debt finance – via a ‘bond offering’ – to help fund two catalogue acquisitions. The specifics of those deals are not yet known, although one is seemingly completed while the other is at its final stages.
In a statement to investors, the music firm said: “Warner Music Group Corp today announced that, through its wholly-owned subsidiary WMG Acquisition Corp, it has commenced a private offering of $250 million aggregate principal amount of additional 3.000% senior secured notes due 2031”. Which sounds like fun.
It then added: “The company intends to use the net proceeds of the offering to fund a portion of the aggregate cash consideration for certain acquisitions”.
A subsequent filing with the Securities & Exchange Commission then added: “In early October we completed an acquisition for certain music assets, and we recently came to an agreement in principle regarding a second acquisition regarding certain other music and music-related assets, for aggregate cash consideration of approximately $338 million. We intend to fund such aggregate cash consideration with the proceeds of this offering and approximately $90 million of cash on hand”.
Although Warner Music’s more buzzy acquisitions in recent years have been of digital and influencer platforms, these two deals seemingly relate to the company’s core business of music rights. There is, of course, increased competition in that particular domain at the moment thanks to the likes of the Hipgnosis Songs Fund hyping up interest in music copyright among investment types.
