Kobalt ‘Funding Capacity’ Tops $1 Billion Following Royalties-Backed Securitization ‘Execution’ and Refinancing

kobalt funding
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Kobalt says its funding capacity is now “more than $1 billion.” Photo Credit: Giorgio Trovato

Less than five months after unveiling an over $700 million catalog partnership with Morgan Stanley, Kobalt says it’s increased its total “funding capacity” to north of $1 billion.

New York City-based Kobalt touted the deployable capital today, via a formal release that was emailed to DMN. The more than $1 billion at hand refers specifically to the mentioned Morgan Stanley-powered tranche as well as a refinancing and a newly obtained $266.5 million from an asset-backed securitization.

The “execution” of the latter, fueled by royalties from a 5,000-song publishing catalog and initially announced towards February’s end, has now wrapped, Kobalt emphasized. Apollo’s ATLAS SP Partners acted as “the sole structuring agent” on the securitization, which marks Kobalt’s first such endeavor.

Also disclosed by the former AWAL owner today is a fresh $450 million revolving credit facility; Truist led said facility “to fully refinance existing indebtedness,” Kobalt signaled. Bigger picture, CFO Catrin Drabble emphasized the points’ significance with regard to Kobalt’s strategy moving forward.

“This refinancing will fuel our growth initiatives and allow us to further fortify our position as an industry trailblazer,” the EY vet Drabble relayed in part. “Along with the Francisco Partners transaction and Morgan Stanley joint venture, these transactions enable us to continue our investment into the business and our technology with far greater flexibility, simultaneously strengthening the best-in-class service we deliver to our songwriters and partners.”

Kobalt’s announcements represent only the latest in a long line of positive signs for the song-rights space. As we explored in detail, the sphere could well be gearing up for a record-setting year. Since January’s start, well-entrenched and emerging players alike have spent heavily on (and made massive commitments to) the catalog arena.

The most noteworthy of these developments are perhaps the $1 billion that Irving Azoff’s Iconic Artists Group (IAG) secured in an HPS Investment Partners-led raise and Sony Music’s record-setting deal for half of Michael Jackson’s catalog.

Other standout plays include Duetti’s $90 million raise, HarbourView Equity Partners’ approximately $500 million in royalty-backed financing, and Pophouse Entertainment’s pact with Cyndi Lauper.

IAG has also closed a reportedly $100 million investment in Rod Stewart’s body of work and a separate tie-up with Roxy Music frontman Bryan Ferry. Meanwhile, the long list of companies that have invested in music IP during 2024 further includes Anthem Entertainment (Chantal Kreviazuk), Believe (White Hill Music), and HarbourView (Jeremih), to name some.

Most recently, Iconoclast today revealed its purchase of Tony Bennett’s catalog and name and likeness rights, with branded watches, a restaurant, and more on the way.