Live Nation has issued $500 million in fresh debt as the pandemic drags on.
Live Nation announced the completion of the half-billion-dollar senior-note round – which it initially unveiled on December 17th – this morning, in a general release. The notes come with a 3.75 percent interest rate and are set to mature in 2028. The Beverly Hills-based concert promoter intends to use the capital to make a payment on a “secured term loan B facility” as well as for “general corporate purposes” including buyouts and “organic investment opportunities.”
Back in May, the Ticketmaster parent company rolled out $1.2 billion worth of senior secured notes (at a 6.5 percent interest rate, with a 2027 maturation), at about the same time as it furloughed 2,000 employees amid the continued pause on concerts and festivals. The latter cuts were followed in September by layoffs affecting hundreds of team members.
Addressing his company’s latest debt offering in a formal statement, Live Nation President and CEO Michael Rapino said: “This added liquidity provides us with the resources necessary to continue exploring growth opportunities while maintaining a strong balance sheet during this time. We remain optimistic about the long-term outlook of our industry, and Live Nation is now even better positioned to help lead the road to recovery.”
On the latter front, Live Nation has emphasized in multiple quarterly earnings reports that it is banking on concerts’ returning “at scale” in the coming summer (a view shared by the majority of live music execs). And from the packed shows that have taken place in areas with relatively lax social distancing requirements (as well as the unauthorized functions that have occurred elsewhere), evidence suggests that fans are eager to resume enjoying traditional live music – and, in turn, to help the space to recover from its massive 2020 losses.
Insomniac (about half of which belongs to Live Nation) quickly sold out tickets to EDC Las Vegas and the Day Trip music festival back in August and September, respectively. And Live Nation (some of which is now owned by the Kingdom of Saudi Arabia) last month revealed the full 65-artist lineup for Lollapalooza Stockholm, slated to take place in early July.
More broadly, Live Nation – which has seen its stock price recover to over $71 per share, from a low of nearly $20 per share during the pandemic’s onset – indicated in an earnings report for the three months ending on September 30th that 83 percent of fans have opted to hold onto their tickets in anticipation of shows’ rescheduled dates.