Blackstone-owned Hipgnosis plots $1.47B music bond sale

Blackstone-owned Hipgnosis plots $1.47B music bond sale
The new debt issuance will be backed by royalties from chart-topping artists like Shakira, Journey, and the Red Hot Chili Peppers.
OCT 25, 2024
By  Bloomberg

Hipgnosis, a company that bought up vast catalogs of popular music, is selling $1.47 billion of bonds backed by royalties from artists including Shakira, Journey, Red Hot Chili Peppers and 50 Cent.  

The bonds from a unit of Hipgnosis Songs Assets will be backed by publishing and sound recording rights for more than 45,000 songs, according to Kroll Bond Rating Agency, which is grading the notes. An independent valuation said that the total catalog is worth about $2.36 billion, based on projected cash flow from the assets. More than 70% of the songs were released more than 10 years ago. 

Hipgnosis was founded in 2018 in London, and helped kick off a feeding frenzy for investors buying music rights from high profile artists. It snatched up all or part of the rights to the catalogs of musicians including Shakira, Neil Young, and Stevie Nicks, among others. 

In an interview with Bloomberg in 2021, Merck Mercuriadis, then head of Hipgnosis, said that he believed the value of many songs could triple in the next decade, in part because streaming royalties would rise. But the company faced a series of problems, including interest rates climbing and an accounting error that cut the book value of its portfolio. Its London-listed shares plunged. Hipgnosis sold itself to Blackstone in a deal that valued the company’s equity at around $1.6 billion and closed in July.   

The bonds that the company is now selling will mark the second securitization of Hipgnosis music royalties, after a $221.65 million sale in 2022. Mitsubishi UFJ Financial Group is leading the latest asset backed security offering. KBRA expects to assign each of the three parts of the deal a grade of A minus. 

Music royalty ABS volume so far in 2024 has totaled around $1.1 billion, according to data compiled by Bloomberg News. 

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.