Apollo backs Concord’s $1.765bn ABS with first of its kind 10-year tranche
Apollo has backed Concord’s $1.765bn (£1.3bn) asset-backed securitisation (ABS) which features a first of its kind 10-year tranche.
The asset manager structured the deal and formed an investor syndicate led by Apollo-managed funds and affiliates.
The transaction comprises a series of five-year, seven-year and 10-year senior notes, secured by Concord’s catalogue of over 1.3 million music copyrights, featuring the songs and recordings of artists such as The Beatles, Beyonce and Bruno Mars.
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The 10-year tranche was privately placed and represents the longest asset-backed term securitisation of music rights to date, according to Apollo.
Proceeds from the transaction, which was more than three times oversubscribed, will be used to repay the music company’s $1.65bn 2022-1 note series and refinance and extend its $100m variable funding note.
“We are pleased to structure and lead this landmark ABS transaction for Concord, which represents a continuation of our long-term financing partnership and demonstrates Concord’s innovative approach to music securitisation through the issuance of the industry’s first 10-year tranche,” said Apollo partner Michael Paniwozik. “We continue to be impressed by the quality and breadth of the actively managed catalogue that Concord has built and look forward to supporting its journey for years to come.”
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Concord’s securitisation catalogue is valued at more than $5.1bn and the notes were rated A+ by KBRA and A2 by Moody’s.
“As Concord continues to grow both our catalogue and frontline roster, ensuring long-term access to institutional capital and continuing to build upon our strong financial foundation are crucial,” said Bob Valentine, chief executive of Concord.
“ABS transactions like the one we just closed will remain a vital part of our growth strategy, allowing us to continue to lower our cost of capital while expanding our global capabilities in support of the artists and songwriters we serve.”
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Apollo Global Securities and ATLAS SP Securities acted as joint bookrunners for the transaction, Redding Ridge Asset Management served as structuring agent, 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 for Apollo affiliates.
