Concord has successfully closed its latest Asset-Backed Securities (ABS) transaction, which sees the company raise $850 million in debt financing through a private securitization backed by its catalog of music rights.
The company said on Monday (October 28) that the transaction would “fuel strategic growth and acquisition[s]” and that it underscores its “ongoing effort to strategically grow and monetize its music assets and position the company as a consequential force in the music industry”.
Concord’s ABS transaction is securitized by royalties from its catalog of over one million compositions, master recordings, and related assets including works recorded by The Beatles, Carrie Underwood, Cheap Trick, Creed, Genesis, Kiss, Mike + The Mechanics, Otis Redding, Phil Collins, Plain White T’s, R.E.M., R.E.O. Speedwagon, and The Rolling Stones.
Apollo, through its Capital Solutions business, Apollo Global Securities, LLC, and together with its affiliate Redding Ridge Asset Management, structured the asset-backed securitization and led an investor syndicate for the transaction.
ATLAS SP Securities, a division of Apollo Global Securities, LLC, acted as a joint bookrunner for the transaction.
As first reported by MBW, a report published by Kroll Bond Rating Agency earlier this month revealed that proceeds from Concord’s latest ABS transaction were used to acquire a $217.3 million catalog from “a highly successful Latin Music artist and songwriter”.
The artist in question was later confirmed by Concord to be Daddy Yankee, the Puerto Rican superstar whose La Última Vuelta World Tourgenerated an estimated USD $198 million in 2022.
Concord acquired parts of the music publishing and recorded music catalog of the reggaetón star, including rights to his own hits including Rompe, Gasolina, and Con Calma, plus his featured artist role on Despacito.
In addition, the acquisition covers some name, image, and likeness (NIL) rights.
Kroll’s report referred to the $850 million ABS transaction as the issuance of the Series 2024-1 Notes. This marks the third series of Notes issued as part of a broader $2.6 billion bond offering backed by music rights from Concord’s catalog.
The first series of notes (the Series 2022-1 Notes) arrived in 2022, totaling $1.8 billion, and was claimed at the time to be “the largest asset-backed securitization offering of music rights in the industry to date in terms of both size of issuance and number of assets (over one million copyrights)”.
Concord’s second series of notes (the Series 2023-1 Notes), totaling $500 million, was issued in October 2023.
According to the report issued by Kroll, proceeds from the latest transaction (the Series 2024-1 Notes), will be used to repay the $500 million Series 2023-1 outstanding notes, “fund reserve accounts as needed, pay certain transaction expenses, and other general corporate purposes”.
Upon the redemption of the Series 2023-1 Notes, Kroll says it will withdraw the related ratings, and only the Series 2022-1 Notes and Series 2024- 1 Notes will remain outstanding.
Kroll’s report noted that “additional collateral was contributed into the securitization” in July 2024 following Concord’s acquisition of the Round Hill Music Royalty Fund Limited assets in 2023 and Mojo Music and Media (also in 2023), which Kroll’s report suggested were valued at a combined $606.3 million.
According to the Kroll report, an independent third party valued Concord’s catalog at $5.1 billion.
Credit: Elena Goss
“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 catalog.”
“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 catalog,” said Bob Valentine, CEO of Concord.
“We are proud to manage a catalog 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.”
“Concord’s management has demonstrated exceptional vision in building a catalog that reflects the breadth and evolution of modern music, and we are pleased to work with Concord once again on this significant transaction.”
Bret Leas, Apollo
Bret Leas, Apollo Partner and Co-Head of Asset-Backed Finance, said: “Concord’s management has demonstrated exceptional vision in building a catalog that reflects the breadth and evolution of modern music, and we are pleased to work with Concord once again on this significant transaction.”
“By anchoring and structuring this ABS, we have continued to help Concord unlock the value of their extraordinary music catalog.”
Paul Sipio, Apollo
Apollo’s Paul Sipio added: “By anchoring and structuring this ABS, we have continued to help Concord unlock the value of their extraordinary music catalog. We are proud to provide a tailored solution to support their success.”
FTI Consulting served as the backup manager for the transaction, with the Bank of New York Mellon acting as trustee. Virtu Global Advisors, LLC provided valuation services, while DLA Piper provided legal counsel for Concord and Milbank LLP for Apollo affiliates.
Elsewhere, in July, Apollo confirmed that it was the lead investor in a USD $700 million “capital solution” for Sony Music Group.
This “capital solution”, said Apollo, is intended to fund “investments in the music industry”.Music Business Worldwide
