Investment giant, Apollo, supports Concord's $1.765 billion Asset-Backed Security by launching an unprecedented 10-year tranche for the first time.
In a groundbreaking move, Concord, a leading music company, has successfully completed a $1.765 billion asset-backed securitization (ABS) featuring music copyrights. The transaction, backed by Apollo Global Management, marks a significant milestone in the music industry, showcasing the growing confidence in music rights as a financial asset class.
The ABS, led by Apollo-managed funds, includes a first-of-its-kind 10-year tranche, representing the longest asset-backed term securitization of music rights to date. This innovation underscores Concord's and Apollo's ability to structure unique financial instruments that attract long-term investors.
The transaction, demonstrating an innovative approach to financing music rights, offers a diverse range of senior notes, including five-year, seven-year, and ten-year securities. This diverse offering caters to different risk appetites and investment horizons, attracting a broader investor base.
The notes are secured by Concord's catalogue of over 1.3 million music copyrights, featuring the songs and recordings of artists such as The Beatles, Beyoncé, and Bruno Mars. The securitisation catalogue is valued at more than $5.1 billion.
The transaction was more than three times oversubscribed, indicating robust investor demand for music rights-backed securities. This high demand underscores the perceived stability and value of music copyrights as collateral for financial instruments.
The proceeds from the ABS will be used to repay Concord's existing debt ($1.65 billion note series) and refinance its $100 million variable funding note. This move optimizes Concord's financial structure, potentially reducing interest costs and improving liquidity.
Apollo partner Michael Paniwozik stated that the deal continues their long-term financing partnership with Concord and demonstrates Concord's innovative approach to music securitisation. DLA Piper provided legal counsel for Concord in the transaction, while Milbank provided legal counsel for Apollo affiliates.
The Bank of New York Mellon acted as trustee for the transaction, and Redding Ridge Asset Management served as structuring agent. Apollo Global Securities and ATLAS SP Securities acted as joint bookrunners for the transaction. Virtu Global Advisors provided valuation services.
Bob Valentine, chief executive of Concord, stated that ABS transactions will remain a vital part of their growth strategy. Apollo continues to be impressed by the quality and breadth of the actively managed catalogue that Concord has built.
This landmark deal highlights both the growing confidence in music rights as a financial asset class and the evolving sophistication of the music industry in leveraging these assets for strategic growth.
The ABS, led by Apollo-managed funds, includes a first-of-its-kind 10-year tranche, showcasing Concord's and Apollo's ability to structure unique financial instruments that attract long-term investors. This diverse offering caters to different risk appetites and investment horizons, providing various securities such as five-year, seven-year, and ten-year notes, with the notes secured by Concord's music copyrights portfolio valued at more than $5.1 billion.
