Credit | Case Study
Apollo Leads Largest-Ever Music ABS Transaction for Concord
In December 2022, Apollo structured and anchored an asset-backed securitization for Concord, a global leader in music publishing, recorded music and theatrical rights licensing. The $1.8 billion transaction was the largest-ever ABS of music rights at time of issuance and illustrates how Apollo’s ecosystem can support and finance stronger businesses through cost-effective, asset-backed financing.
In December 2022, Apollo structured and anchored an asset-backed securitization for Concord, a global leader in music publishing, recorded music and theatrical rights licensing. The $1.8 billion transaction was the largest-ever ABS of music rights at time of issuance1 and illustrates how Apollo’s ecosystem can support and finance stronger businesses through cost-effective, asset-backed financing.
When the leadership team at Concord began to think about refinancing options for the company’s maturing debt, they wanted something long term and cost efficient, and they also sought a structure that could grow alongside their business. Concord, already among the world’s largest independent music companies, had been on a strong trajectory in an industry that had benefitted from the proliferation and adoption of digital streaming and they wanted flexible capital that suited their corporate strategy, including the pursuit of accretive catalog acquisitions.
Building on a longstanding relationship, the Concord team turned to Apollo for a bespoke, flexible, and scaled capital solution. Working with Concord, Apollo’s Capital Solutions and Asset-Backed Finance teams quickly identified an opportunity to structure and securitize a debt offering backed by cash flows from high-quality, highly diversified songs and sound recordings owned by Concord.
What resulted was a 5-year, $1.8 billion ABS backed by a catalogue of over 1 million Concord-owned and actively managed music assets, spanning a wide range of genres and including 300-plus GRAMMY Award winners. The catalogue was conservatively valued at more than $4 billion, implying an approximate 44% loan-to-value for the notes, which were rated A+ by KBRA.
Because the new financing was secured by royalties generated by the catalogue, Concord was able to lower their overall borrowing costs by unlocking value from existing assets. ABS proceeds allowed the company to refinance its debt and provided additional capital for growth, with optionality to upsize the facility in the future. Bob Valentine, President of Concord, highlighted the ABS issuance as a creative way to source new permanent capital via a facility that can grow with the company.
For our part, Apollo not only underwrote and structured the securities, but we also put together an Athene-led investor syndicate that included third-party institutions and insurers. Serving as a principal investor demonstrates a high degree of alignment with other investors in the credit risk we originate.
This transaction leveraged the best of Apollo’s ecosystem – including diverse expertise, permanent capital, and strong client and investor relationships – to provide a creative, long-term solution with certainty of execution.
If you are interested to learn how we can help solve your business funding needs, contact: ACS@Apollo.com
1Source: Apollo analysis based on precedent music asset-backed securitization transactions.
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