Earlier this week, Digital Music News was first to report that Live Nation intended to issue $800 million in senior secured notes for “general corporate purposes.” Now, the leading concert promoter has upped the debt offering to $1.2 billion as part of an effort to continue operations through the summer.
As with the previously planned $800 million in debt, this $1.2 billion package will be made available through a private placement and will mature in 2027. Certified investors who back the senior secured notes will enjoy a 6.5 percent yearly interest rate, and the investment window is expected to close next Wednesday, May 20th.
If obtained, the additional $1.2 billion debt tranche will hike Live Nation’s total creditor obligations to approximately $4.85 billion.
At the time of this writing, Live Nation’s stock, bought and sold under the symbol LYV, was trading for just over $39 per share, having started the week at slightly more than $41 per share. Shares dipped into the $36 range following the senior secured notes announcement and a credit downgrade from Standard and Poor’s Global.
Predictably, with essentially all traditional concerts and crowd-based functions postponed because of the coronavirus (COVID-19) crisis, Live Nation disclosed a significant revenue drop in its Q1 2020 earnings report. However, the fiscal analysis wasn’t entirely negative, as Live Nation indicated that an impressive 90 percent of ticketholders are opting to keep their passes even when refunds are available.
Meanwhile, artists and venue professionals are experimenting with innovative methods for safely delivering live music to fans. For example, America’s first drive-in concert is set to initiate next month, after successful pilots in Europe. Undoubtedly, other such performances will follow – particularly if this pioneering effort proves successful, attendance-wise.
Similarly, artist Travis McCready was set to play the United States’ first socially distant concert in Arkansas today, until Governor Asa Hutchinson shut down the attempt.
Separately, the Event Safety Alliance (ESA) laid the groundwork for concerts’ return by penning a comprehensive guide to simultaneously reopening venues and protecting fans.