Fundraising of $1.7 billion secured, anchored by a library of 1.3 million copyrighted works by Concord.
## Concord Closes Largest Music Rights Securitization to Date
Concord, an independent music company, has successfully completed a significant asset-backed securities (ABS) transaction, issuing bonds worth approximately $1.765 billion. This deal, which is backed by Concord's extensive music catalog, marks the company's fourth securitization offering and is the largest and longest tenured asset-backed term securitization of music rights to date.
The transaction, initially planned for $1.75 billion, slightly exceeded the original amount due to robust investor demand, which was more than three times oversubscribed.
### Financial Boost for Continued Growth
The proceeds from the bond issuance will be used to fuel Concord's continued growth. The funds will be allocated towards strategic initiatives, such as acquisitions and development projects.
### Industry Trend and Market Perception
The transaction underscores a growing trend in the music industry, where companies are using asset-backed securities to unlock value from their music catalogs. Similar deals by other industry players, such as Hipgnosis and HarbourView, demonstrate the increasing recognition of music rights as viable investment opportunities.
The success of Concord's ABS transaction also highlights the perception of music rights as stable and valuable assets, which can attract significant investment and support the growth of music companies in a rapidly changing industry.
### Enhanced Financial Flexibility
By securitizing its music rights, Concord gains financial flexibility, which is crucial for adapting to industry changes and pursuing strategic expansions. This transaction will help Concord lower its cost of capital and expand its global capabilities in support of the artists and songwriters it serves.
### Apollo's Role in the Transaction
Apollo, through its Capital Solutions business and affiliates Atlas SP Partners and Redding Ridge Asset Management, structured the ABS transaction and formed an investor syndicate led by Apollo-managed funds and affiliates. Apollo managing director Paul Sipio expressed continued support for Concord's journey.
### Ratings and Oversubscription
The notes were rated A+ by KBRA and A2 by Moody's, reflecting the high quality of Concord's music catalog. The transaction was more than three times oversubscribed, indicating robust investor demand for Concord's ABS strategy.
Bob Valentine, CEO of Concord, stated that ensuring long-term access to institutional capital and building upon the company's strong financial foundation are crucial for Concord's growth. This landmark transaction, led by Apollo, demonstrates Concord's innovative approach to music securitization.
The issuance proceeds will be used to repay Concord's $1.65 billion 2022-1 note series and refinance and extend its $100 million variable funding note. The catalogue, valued at over $5.1 billion, includes the songs and recordings of artists such as The Beatles, Beyonce, Bruno Mars, Carrie Underwood, Creedence Clearwater Revival, Daddy Yankee, Ed Sheeran, Genesis, Imagine Dragons, John Fogerty, Kiss, Michael Jackson, Otis Redding, Phil Collins, Pink Floyd, REM, Rihanna, Rodgers & Hammerstein, Taylor Swift, and the Rolling Stones.
The success of Concord's music rights securitization, amounting to approximately $1.765 billion, demonstrates the entertainment industry's growing acceptance of music rights as viable financial investments, with notable precedents set by companies like Hipgnosis and HarbourView. The funds from this extensive transaction will not only provide a financial boost for Concord's continued growth through strategic initiatives like acquisitions and development projects but also enhance its financial flexibility. This flexibility is essential for adapting to industry changes and pursuing strategic expansions, lowering Concord's cost of capital and expanding its global capabilities.
