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Concord Refinances Debt: Indie Raises $600 Million for Successful, Oversubscribed Term Loan

At the end of July Concord successfully raised  $600 million coming from a syndicated term loan run by J. P. Morgan, which was used to pay down existing debt.

At the end of July Concord successfully raised  $600 million coming from a syndicated term loan run by J. P. Morgan, which was used to pay down existing debt. The refinancing leaves the company with nearly $400 million in availability on its revolving credit facility for future acquisitions and working capital.

In coming to market, the company received a B1 debt rating from Moody’s and a B+ rating from Standard & Poor. While both ratings are below the “investment grade” level that some type of institutional investors require in order to invest in a company’s debt, the Concord offering clearly had no trouble attracting investors as the company initially planned to raise $400 million from the term loan, but increased that to $600 million when the syndication was oversubscribed by six times, or bids totaling $2.4 billion. The debt is secured, apparently by the company’s catalog, which also is attractive to investors.

“This highly successful debt offering is further validation that institutional investors believe in Concord’s long-term strategy of building one of the preeminent independent music companies in the world,” Concord CFO Bob Valentine said in a statement. “It also shows that those investors are hungry to invest in timeless music content with global appeal that can be legitimately accessed and enjoyed by consumers everywhere, in more diverse and readily available ways than at any time in history.”

The new debt and expanded revolver, sources say, was used to pay down some $600 million in existing debt in the form of an existing term loan of $98 million; and pay off $502 million in revolver debt taken on before that facility was downsized and amended with some new ratios in its financial covenants.


Concord, which did the debt offering under the name Alchemy Copyrights LLC,  now has $69 million drawn down from the $450 million revolver, which leaves $381 million in availability, plus cash on hand. At its March 31 fiscal year-end, that totaled $60 million, according to Moody.

The company, which is 93% owned by the Michigan State Retirement System — with the remainder apparently owned by company management — specializes in making investments in iconic catalogs on the publishing side, proven catalog sellers on the recorded music side; as well as having a diverse theatrical rights company.

“We couldn’t be happier with the results that the J.P. Morgan team achieved for us in this transaction,” Concord CEO Scott Pascucci said in a statement on the transaction. “Their execution was flawless, and it is very satisfying to see Concord’s hard work and strategic growth of the past few years be so well-received by such a large group of sophisticated financial institutions.”


Concord garnered $448 million in revenue for the year ended March 31, according to the Moody’s rating report.

In looking at Concord’s annual revenue, it breaks out to about $201 million for the label, $170 million for the publishing operation and $77 million for the theatrical arm, which besides R&H Theatricals, also includes the Andrew Lloyd Webber Collection and the Tams-Witmark catalog, which includes works by Cole Porter, George & Ira Gershwin, and Cy Coleman.

Breaking out revenue another way, about $318 million are derived from U.S. operations while $129 million come from international operations. Moreover, the report says that catalog comprises 87% of revenue, so looking at the recorded music and publishing revenue of $372 million, that means catalog generates about $323 million for catalog and current releases about $48 million.

In the April 2019 issue of Pensions & Investments — a trade magazine that follows institutional investors — Michigan deputy treasurer Jon Braeutigam was quoted as saying that Concord had an equity valuation of about $1.8 billion.


Concord’s valuation was undoubtedly boosted by over $1 billion in acquisitions and organic growth Concord has made since 2017. In fact, since the Michigan state deputy treasurer disclosed that equity valuation in 2019, when debt, subsequent acquisitions, investments in organ growth and maybe even further equity investments are considered, the company’s overall enterprise value is in the ball park of $3 billion to $3.5 billion, sources say. Those acquisitions included buying Imagem, which include the Rodgers and Hammerstein Organization; a majority position in Pulse Music Group, and the recently announced Imagine Dragons publishing catalog, the company says. Already, the company’s music publishing division represents more than 400,000 songs; while the recorded music operation owns such iconic label catalogs as Stax, Fantasy, and Rounder, as well as the Kidz Bop brand, issues about 100 albums a year and has a catalog of over 16,000 albums.

“For more than two decades J.P. Morgan has had the pleasure of working with Concord and watching them evolve to become the preeminent independent music company they are today,” J.P. Morgan’s corporate client banking and specialized industries head of entertainment industries and the west region David Shaheen said in a statement. “Concord’s success is a testament to the quality of their management and strength of sponsorship, we look forward to helping them build on their numerous accomplishments.”