Lyrics & Northleaf Launches $300 Million Bond Backed by Spirit Music Royalties – Billboard

Northleaf Capital Partners will raise $303.8 million through a bond sale backed by music royalties. WHO‘S Pete Townshend, country star Tim McGraw and other artists in Spirit Music Group’s diverse music rights collection.

Follow Ross Cameron, a partner at Lyric Capital Group, a private equity firm and financial backer of Spirit. Cameron, who co-founded Lyric in 2019 with a managing partner, said the sale was a “joint effort” by Northleaf and Lyric to provide an “alternative” to another debt. Jon Singer, former CEO and current president of Spirit.

Partnership with Northleaf, invest 500 million dollars in Lyric in October, “putting Spirit Music Group in a position to continue doing what they do best – serving the community of writers [and] Cameron said. Lyrics buy goods directed by manager of Spirit used $350 million, including $280 million in equity from Morgan Stanley Alternative Investment Partners, to refinance the company.

While a number of publishing investors have sold equity in recent years to build battle chests, the concept of securitization of musical assets – selling bonds backed by music royalties – has reached stature in 1997 as an investment banker. David Pullman sold David Bowie raised $55 million from a 10-year bond sale backed by David Bowie’s principal recording and publishing royalties. Pullman continues to sell bonds backed by the publishing assets of James Brown, the Isley Brothers, Ashford & Simpson, and the Holland-Dozier-Holland composition portfolio. Bowie didn’t have a good timing, though: U.S. music sales peaked in 2001, prompting the rating agencies to downgrade their contracts, even though they were paid on schedule in 2007.

Northleaf’s bonds, which will be given an investment grade A investment rating by the Kroll Bond Rating Agency, will appeal to investors who increasingly see music royalties as a safe and recession-proof asset. In the past four years alone, independent companies such as Spirit, Hipgnosis Songs Fund, Concord Music Group, Round Hill Music and Primary Wave Music have raised and spent billions of dollars on major publishing rights. Big music companies are also collecting songwriting and recording catalogs from people like Bob Dylan (Universal Music Publishing for $375 to $400 million), Paul Simon (Sony Music Publishing for a Undisclosed amount) and Bruce Springsteen (Sony Music for more than 500 million dollars).

In its 26-year history, Spirit has amassed a catalog of over 100,000 songs, including 800 hits, featuring rocker Billy Squier (“The Stroke,” “Lonely is the Night”), jazz music great Charles Mingus, T. Rex (“Get It On (Bang a Gong)”), James William Guercio (producer of the Chicago and Blood, Sweat & Tears albums), Graham Nash (of The Hollies and Crosby, Stills) and Nash) and composer Henry Mancini (“Moon River,” “Pink Panther Theme”). Over the past two years, Spirit has acquired the songwriting catalog of Kara DidGuardi (hits by Pink!, Katy Perry and Carrie Underwood) and Ingrid Michaelson (“The Way I Am” and “Girls Chase Boys”) as well as several notches. McGraw’s master of the recordings.

https://www.billboard.com/pro/lyric-northleaf-bond-pete-townshend-tim-mcgraw-royalties/ Lyrics & Northleaf Launches $300 Million Bond Backed by Spirit Music Royalties – Billboard

Dais Johnston

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