Skip to main content

Universal Music Group to Sell $1.05 Billion of Notes

The offering is expected to close on June 30, 2022.

Universal Music Group announced plans on Thursday (June 23) to sell 1 billion euros ($1.05 billion) of notes. UMG priced 500 million euros ($526 million) of 3.000% senior unsecured notes due 2027 and 500 million euros ($526 million) of 3.750% senior unsecured notes due 2032. The offering is expected to close on June 30, 2022.

The debt will be sold through the company’s new Euro Medium Term Note program, listed on the Euronext Amsterdam exchange where UMG’s stock is listed. Known as a debt security, a euro medium-term note is issued and traded outside of the United States. Like an equity security – common stock – a debt security allows a company to raise money through public markets. But unlike equity, debt does not give the shareholder ownership of a company. UMG did not raise capital when it listed on the Euronext Amsterdam in Sept. 2021 as a spin-off from Vivendi.

Related

The proceeds from the issuance will be used to refinance existing indebtedness and pay transaction fees and expenses. UMG carried 2.6 billion euros ($2.7 billion) of long-term debt and cash of 585 million euros ($616 million) as of December 31, 2021, according to its financial presentation for 2021. That gave UMG a net debt-to-EBITDA ratio of 1.2. UMG’s revolving credit facility and term loan both require a financial net debt to EBITDA ratio of 4.0 or lower, according to UMG’s 2021 annual report. Moody’s and S&P Global Ratings both believe UMG will maintain a debt-to-EBITDA ratio below 2.0.

BNP Paribas and BofA Securities acted as global coordinators with Citigroup, Goldman Sachs, MUFG and Société Générale as the active bookrunners on the issuance. CACIB, Commerzbank, IMI-Intesa Sanpaolo, ING, Mediobanca, Mizuho, Morgan Stanley Europe SE, Natixis and Santander acted as passive bookrunners.