Hipgnosis strikes new debt deal in ‘increasingly unpredictable’ market
Music investment titan Hipgnosis Songs Fund has secured a new debt deal as the company navigates an “unpredictable” market.
The company confirmed this morning that it has entered into a new Revolving Credit Facility (RCF) with a commitment of $700 million that runs for five years through September 30, 2027, providing additional flexibility and headroom.
Additionally, Hipgnosis, the UK’s first listed investment firm offering investors pure exposure to songs and associated intellectual property rights, said it was in advanced talks to secure the majority of its exposure at rates. interest rate by entering into interest rate swaps to hedge the interest on it attracted debt.
“In an increasingly unpredictable debt market, this agreement significantly reduces our interest margin and the swaps we hope to enter into imminently provide long-term certainty and a stable platform to take advantage of tailwinds. of our industry,” said Hipgnosis Merck Founder and CEO Mercuriadis.
“The continued growth of streaming and incremental revenue streams from digital platforms regardless of macro conditions, coupled with the improved terms of our new RCF is very encouraging for SONG and will bring value to our shareholders as revenues continue to grow. of our song portfolio will increase.”
Founded in 2018, the solidify already has hundreds of catalogs, with more than 64,000 songs, from Fleetwood Mac, Neil Young, Shakira and 50 Cent.
As of March 31, 2022, the company’s gross debt was $600 million. The credit margin on this debt was 3.25% on a floating rate based on the London Interbank Offered Rate (LIBOR). Net debt as a percentage of operating NAV as of March 31, 2022 was 25.4%.
City National Bank was the lead arranger and sole bookrunner for the new credit facility with Truist Securities, MUFG Union Bank, NA and Fifth Third Bank as co-managers.