Recognition Music Group Bond Sale
Recognition Music Group, known for managing a wide range of popular music, is set to sell $372 million worth of bonds supported by royalties from well-known artists like Red Hot Chili Peppers, Journey, Justin Bieber, and Shakira.
Asset Valuation and Usage of Proceeds
The total value of the music assets being offered for the bond sale amounts to $2.95 billion. The proceeds from this sale will be utilized to repay existing debts, fund reserves and transaction costs, along with other general corporate purposes.
Market Impact and Ratings
The bond sale is a strategic move by Recognition Music Group, leveraging the growing popularity of streaming services that has significantly increased royalty cashflows. This sale has garnered attention with Fitch and S&P providing preliminary credit ratings of single-A across the board.
Recognition’s Ongoing Initiatives
Recognition has been actively involved in the song-backed debt market, including previous notes sales in the recent past. The company’s aim is to expand its music rights portfolio with the support of Blackstone affiliates who acquired Recognition in 2021.
Barclays Plc is leading the bookrunning for this proposed music royalty ABS by Recognition. The music catalog rights held by Recognition are managed by prominent industry organizations like Sony Music Publishing, Kobalt, and Universal Music Publishing Group.
The music royalty ABS market has seen significant activity this year, totaling around $1.7 billion, showcasing the demand for such unique financial instruments.
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