Warner Music Group’s WMG Acquisition Corp. has officially launched a $535 million senior secured note offering, with the intention of using the capital to purchase “certain music and music-related assets.”
The New York City-headquartered record label – which has quietly acquired Moscow’s Zhara Music, the assets of 12Tone Music, and a reported $200 million stake in Rotana Music in 2021 – unveiled the more than half-billion-dollar note offering this morning. And the corresponding windfall, if it’s not used to fund buyouts, will instead cover “general corporate purposes,” higher-ups indicated. (Warner has also inked multimillion-dollar IP agreements with Madonna, David Guetta, and the David Bowie estate through 2021’s first 11 or so months.)
Additionally, Warner Music, having rolled out $535 million worth of senior notes in June of 2020 and another $550 million in August of the same year, “may also use the net proceeds” from this latest raise “to redeem all or a portion of the” senior notes “at any time on one or more occasions on or prior to the fifth business day following December 20, 2021.”
WMG will have to provide notice of such a move “at least five business days” beforehand and pay a “special optional redemption price equal to the issue price” of the notes plus one percent of the principal (besides any accrued interest). In disclosing prior raises, Warner Music Group has detailed the maturation date and interest rates in a follow-up release, but this supplementary document hasn’t yet gone live on the company’s website.
Separately, Warner Music today also announced the launch of WMX, “a next generation services division that will connect artists with fans and amplify brands in creative, immersive, and engaging ways,” per execs.
The new business unit encompasses “a rebranded WEA commercial services & marketing network” as well as “the company’s media & creative content arm,” arriving one day after Universal Music publicly acknowledged plans to buy and develop artist brands.
WMG likewise emphasized that WMX will spearhead “creative cross-channel campaigns,” seemingly with a focus on digital content and platforms like Uproxx, Songkick, and HipHopDX, the latter of which was added to Warner Music’s portfolio in September of 2020.
Addressing the debut of WMX in a statement, WMG CEO of recorded music Max Lousada said in part: “There’s an ever-expanding universe of opportunities for talent to build devoted fanbases and extend their brands. In this rapidly evolving attention economy, WMX is designed to provide our artists and labels with a deep, dynamic range of services – covering everything from streaming to merch to branded content and beyond.”
At the time of publishing, Warner Music Group stock (NASDAQ: WMG) was trading for an even $44 per share – up just slightly from yesterday’s close, but almost 20 percent since 2021’s beginning.