Universal Music Group plans to raise 750 million euros ($801 million) from the sale of 4.000% senior unsecured notes due 2031, the company announced on Tuesday (June 6). The notes will be issued from UMG’s Euro Medium Term Note program and listed on Euronext Amsterdam. The proceeds will be used to refinance existing debt and pay transaction fees and expenses. UMG expects the offering to close on June 13.
For this issuance, BNP Paribas and BofA Securities acted as global coordinators. They, along with Crédit Agricole CIB, Goldman Sachs Bank Europe SE, ING and Mizuho, were active bookrunners. Citigroup Global Markets Europe AG, Intesa, Mediobanca, Morgan Stanley Europe SE, MUFG Securities (Europe) NV, Natixis, Santander and Société Générale acted as co-managers.
UMG had total debt of 2.25 billion euros ($2.41 billion) at the end of 2022, according to the company’s financial statements, and a net debt-to-adjusted EBITDA ratio of 0.9. The company sold 1 billion euros ($1.05 billion) of bonds in June 2022. Half of the amount was 3.000% senior unsecured notes due 2027. The other half was 3.750% senior unsecured notes due 2032.
Moody’s gave a rating of Baa1 and an outlook of stable for UMG’s notes issued in 2022. The ratings agency cited UMG’s “best-in-class music catalog,” “experienced management team” and “solid financial profile” in addition to the assistance it receives from “secular tailwinds” for the global music industry. Moody’s rating also reflected challenges such as UMG’s “continued need for investments to secure new hits,” “increased competition from the emergence of financial players” in the catalog acquisition space and unforeseen “risks related to evolving technologies” that in the past have hurt music companies’ revenues.
