Having returned to Wall Street — and generated almost $2.5 billion — earlier this month, Warner Music Group (WMG) is moving forward with plans to issue $535 million worth of senior secured notes.
Warner Music Group announced the substantial capital-raising initiative in an official release this morning. Like most other senior note offerings — Live Nation issued $1.2 billion in debt in May, and SiriusXM rolled out $1.5 billion in senior notes earlier this month — only qualified institutional buyers (not U.S. individuals) will be eligible to invest.
WMG’s newest round of senior secured notes will mature in 2030, with interest accruing at an annual rate of 3.875 percent.
Per the Big Three record label’s release, the $500 million-plus raise will be used (along with cash on hand and “the potential offering of euro-denominated notes”) to buy outstanding senior notes due to mature in 2023 (these notes have an annual interest rate of five percent).
Plus, WMG is expected to utilize the $535 million in capital for the conditional redemption of an additional tranche of senior secured notes.
On the day, Warner Music’s stock, traded under the symbol WMG, is up about one percent, with its per-share price hovering around $32.30 at the time of this writing.
The value represents a $7.30 hike from when the stock became available (at $25 per share) two weeks back, following nearly a decade of completely private ownership from Access Industries.
Earlier this week, DMN was first to report that Chinese conglomerate Tencent had purchased a larger portion of WMG’s shares than previously believed, to the tune of 10 percent of the total Class A stock tranche and about 1.6 percent of the company as a whole.
Tencent is reportedly looking to follow its WMG investment by acquiring a stake in Beijing-based video platform iQIYI, one of Tencent Video’s largest competitors. However, the entities haven’t reached a deal — or publicly acknowledged rumors of their acquisition-centered talks.