Hipgnosis has revealed a nearly $1.5 billion asset-backed securitization (ABS). Photo Credit: Hipgnosis
Another day, yet another asset-backed securitization – this time from Blackstone's Hipgnosis, which has formally announced a $1.47 billion deal.
The appropriate catalog investor reached out with word of the securitization, which arrives on the heels of similar moves from Concord as well as Duet. However, as many know, the newest ABS also follows a hard-fought battle for Hipgnosis Songs Fund, or the Merck Mercuriadis-founded fund that scooped up all manner of prominent song rights during a much-publicized landgrab.
Multiple twists and turns later, the Hipgnosis Songs Fund saga concluded earlier this year, when Blackstone topped the aforementioned Concord with a roughly $1.6 billion bid to take the company private.
Royalties from the over 45,000-track catalog in question, featuring works from Neil Young, Christine McVie, Rodney JerkinsDierks Bentley, and more, are backing the $1.47 billion ABS, per Blackstone and Hipgnosis.
(Technically, several other high-profile catalog deals, including with the likes of Justin Bieberwere spearheaded by Hipgnosis Song Management, which had been under Blackstone's control long before the HSF privatization. Those distinct song rights don't appear to have factored into today's asset-backed securitization, although HSM itself rolled out a smaller ABS back in August 2022.)
As we've charted in detaila surprising number of Hipgnosis entities, including but definitely not limited to the main Hipgnosis Songs Fund as well as its Hipgnosis Song Management “investment advisor,” were making moves at the brand's peak.
But with the take-private dust having largely settled, and with Blackstone now fully behind each of the companies involved, the release pertaining to the securitization refers to the overarching operation simply as “Hipgnosis.”
Returning to the actual MUFG Securities-structured ABS, the notes at hand, having received an A- rating from KBRA, attracted 25 investors, per Hipgnosis and Blackstone.
Therefore representing “one of the most diversified ABS issuance for music rights to date,” the securitization will enable Hipgnosis to pay down “existing debt in full and support future acquisitions,” higher-ups indicated.
“With this ABS refinancing completed,” Hipgnosis CEO Ben Katovsky and CFO Dan Pounder elaborated in a joint statement, “we will continue to work on expanding the investor base with further institutionalization of the asset class leveraging Hipgnosis' proprietary technology and data analytics platform across underwriting, monitoring and reporting.”
On the debt front, the previously highlighted Hipgnosis Songs Fund buyout also saw Blackstone assume the company's sizable pile of debt, which had prevented the business from exploring additional IP purchases (and complicated operations in different ways) for some time before it was taken private.
And when it comes to future acquisitions, it will, of course, be interesting to see which bodies of work Hipgnosis buys down the line. As things stand, the sub-sector is populated by more deep-pocketed potential purchasers than ever, and Hipgnosis remains entangled in an ugly payments-related battle with Barry Manilow.