Just two weeks after it raised nearly $300m through the sale of C shares, Hipgnosis Songs Fund has elevated the quantity of debt it might probably entry so as to proceed its aggressive acquisition technique.
UK-based Hipgnosis, which trades on the London Stock Exchange, introduced earlier immediately (July 23) that it had secured a rise its Revolving Credit Facility from GBP £150m (circa $188m) to USD $400m.
The new deal has been agreed with the credit score facility’s syndicated group of lenders, together with JPMorgan Chase Bank as Lead Arranger.
The transfer to denominate funds in USD reasonably than GDP, mentioned Hipgnosis, is a “partial natural hedge against FX movements as the majority (89% as at 31 March 2020) of [our] catalogs are acquired in US dollars and the majority of [our] income is received in US dollars”.
Hipgnosis additionally says the credit score extension stays in accordance with one among its central agreements with traders – that the full indebtedness of Hipgnosis as a a number of of its Net Publisher Share (i.e. gross revenue on royalties) should not exceed 4.5x.
Having already spent over $1bn on music copyrights and earnings streams, Hipgnosis told its investors earlier this month that its funding adviser – The Family (Music) Limited – is at present “in active discussions on a pipeline of catalogs with an acquisition value of over £1bn”.
Six days after making that announcement, Hipgnosis introduced that it had acquired the catalog of Lady Gaga collaborator, RedOne, for an undisclosed charge.
Hipgnosis Songs Fund noticed its revenues develop to £64.7m (roughly $81m at present trade charges) within the 12 months to finish of March 2020.
Hipgnosis founder and CEO, Merck Mercuriadis, said in the firm’s annual report, launched on July 3: “When compared with the three major song companies [in the same annual period] we have achieved between 7% and 12.5% of their revenue on between 0.5% and 0.9% of their number of songs.”
Added Mercuriadis: “Our small catalog of 13,291 Songs, albeit with an extraordinarily high ratio of success within it, is earning £4,868 per song vs something less than £150 per song for our competitors.”Music Business Worldwide