SESAC Closes $889 Million Whole Business Securitization

SESAC Music Group (SMG) has closed a USD $889 million whole business securitization, the company’s fourth (and biggest) to date.

How it works:

• As per Music Business Worldwide, the US headquartered SMG structures its debt by securitizing the entire company’s operation, rather than securing finance backed by assets such as music rights (like Concord’s recent $1.77 billion ABS).

• Whole business securitization helps bankroll its acquisitions, such as that of production music company Audio Network in 2021.

• SMG claims its latest issuance is “the largest 144a, rated whole business securitization in the music sector to date.”

• SMG is majority-owned by Blackstone, and is home to SESAC PRO, Harry Fox Agency (HFA) and AudioSalad.

The fine print:

• SMG issued the bonds through a series of new five-year senior notes, backed by “substantially all SESAC Music Group’s assets and revenues,” as per the company.

• This includes subsidiaries in its Performing Rights and Music Services divisions.

• SMG’s Performing Rights division represents Ariana Grande, Kurt Cobain, Jack Harlow, Billie Joe Armstrong and Axl Rose, as well as prominent TV and film composers.

• Its Music Services arm offers copyright administration, licensing and royalty collection services for rightsholders globally via subsidiaries such as AudioSalad, Mint, Audiam, and Rumblefish.

• The latest transaction brings SMG’s total outstanding debt to roughly $1.1 billion.

• As per SESAC, the securitization was met with robust investor interest, with demand three times oversubscribed.

What they said:

• John Josephson, SESAC Music Group Chairman and CEO: “WBS transactions like the one we just closed will remain a vital part of our growth strategy, allowing us to continue to lower our cost of capital while expanding our global capabilities in support of the independent songwriters, composers, publishers, labels, artists and CMOs we serve.”