Concord has closed $850 million in an asset-backed securities (ABS) transaction based on a diverse catalogue of music assets.
The financing marks Concord's third securitisation offering and is cross-collateralised with the notes offered in 2022. Taken together, Concord said they now make up the largest music-backed asset-backed securitisation to date in the sector.
In a statement, Concord said the issuances of five-year senior notes “underscore Concord's ongoing effort to strategically grow and monetise its music assets and position the company as a consequential force in the music industry”.
Concord recently acquired the key elements of Daddy Yankee’s catalogue for $217.3 million.
The notes will be secured by music royalties from a pool of catalogues containing over one million songs, including works recorded by The Beatles, Carrie Underwood, Cheap Trick, Creed, Genesis, Kiss, Mike + The Mechanics, Otis Redding, Phil Collins, Plain White T’s, REM, REO Speedwagon and the Rolling Stones.
"This transaction represents another significant milestone for Concord and the global music industry as we close our third music ABS offering, continuing our strategic efforts to elevate and support the artists and writers in our catalogue," said Bob Valentine, CEO of Concord. "We are proud to manage a catalogue with such a remarkable depth of artistic talent and cultural importance. We are grateful to our financing partners, Apollo and Atlas SP, for helping us create a long-term capital structure that supports our growth and strengthens the financial foundation that allows us to keep investing in the music industry. As we grow to new heights, our focus continues to be squarely on our artists and the incredible art they create."
The catalogue is valued at more than $5 billion, resulting in an approximate 52% loan-to-value ratio for the offering, and the notes are rated A+ by KBRA and A2 by Moody’s.
Apollo, through its Capital Solutions business, Apollo Global Securities structured the asset-backed securitisation (ABS) with its affiliate Redding Ridge Asset Management, and led an investor syndicate for the transaction.
Atlas SP Securities, a division of Apollo Global Securities, acted as a joint bookrunner for the transaction. Proceeds from the issuance will be used to retire the private 2023-1 note issuance, fund additional acquisitions and support Concord’s continued growth.
"Concord’s management has demonstrated exceptional vision in building a catalogue that reflects the breadth and evolution of modern music, and we are pleased to work with Concord once again on this significant transaction,” said Bret Leas, Apollo partner and co-head of asset-backed finance.
“By anchoring and structuring this ABS, we have continued to help Concord unlock the value of their extraordinary music catalogue,” added Apollo’s Paul Sipio. “We are proud to provide a tailored solution to support their success.”
FTI Consulting served as the back-up manager for the transaction, with the Bank of New York Mellon acting as trustee.
Virtu Global Advisors provided valuation services, while DLA Piper provided legal counsel for Concord and Milbank LLP for Apollo affiliates.
The DLA Piper team was co-led by Robert Sherman, co-chair of DLA Piper’s Entertainment Finance practice and partner Claire Hall (both of Los Angeles) and included partners Gerald Rokoff (New York) and Mark Friedman (Baltimore); of counsel Greg Young (Los Angeles); and associates John Wei (Boston) and Rachel Lee and Chalize Taghdiz (both in Los Angeles).
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