TIDMSONG
RNS Number : 4551B
Hipgnosis Songs Fund Limited
03 October 2022
LEI: 213800XJIPNDVKXMOC11
Hipgnosis Songs Fund Limited ("Hipgnosis" or the "Company")
Hipgnosis Songs Fund announces debt refinancing
3 October 2022
The Board of Hipgnosis Songs Fund Limited, the first UK listed
investment company offering investors a pure-play exposure to songs
and associated intellectual property rights, and its Investment
Adviser, Hipgnosis Song Management Limited, are pleased to announce
the successful refinancing of the Company's debt facilities.
The Company has entered into a new Revolving Credit Facility
(RCF) with a commitment of US$700 million which runs for five years
until 30 September 2027. The facility will be used to refinance, in
full, the Company's pre-existing RCF and for working capital
purposes. In accordance with the Investment Policy, any borrowings
by the Company will not exceed 30% of the value of the net assets
of the Company.
Interest on the new facility charged is based on the Secured
Overnight Financing Rate (SOFR), published by the New York Federal
Reserve, plus a margin of between 2.00% and 2.25% depending on the
gross drawn debt. The initial margin will be 2.00%.
In addition, the Company is in advanced talks to fix the
majority of its interest rate exposure by entering into interest
rate swaps to hedge the interest on the Company's drawn debt. The
Company expects the completion of this transaction shortly and will
update the market in due course.
City National Bank was lead arranger and sole bookrunner for the
new debt facility with Truist Securities, Inc., MUFG Union Bank,
N.A. and Fifth Third Bank as co-leads.
As reported in the Company's Financial results, at 31 March 2022
the Company's gross debt was $600 million. The credit margin on
this debt was 3.25% over a floating rate based on the London
Interbank Offered Rate (LIBOR). Net debt as a percentage of
Operative NAV at 31 March 2022 was 25.4%.
Merck Mercuriadis, CEO and Founder of Hipgnosis Song Management
said:
"In an increasingly unpredictable debt market, this deal
materially reduces our interest margin and the swaps we hope to
close imminently provide long term certainty and a stable platform
to take advantage of our industry's tailwinds.
"The continued growth in streaming and additional revenue
streams from digital platforms, irrespective of macroeconomic
conditions, coupled with the improved terms of our new RCF is very
encouraging for SONG and will deliver value to our shareholders as
income from our portfolio of songs increases."
Chris Helm, CFO (SONG) of Hipgnosis Song Management said:
"Our new debt facility reduces the interest margin and provides
added flexibility and headroom for the Company.
"This is a strong commitment from both our new and old lenders
and we would like to thank them for their support."
Jim Irvin, Senior Vice President, City National Bank said:
"We are extremely optimistic about Hipgnosis Songs Fund's growth
and potential, which is why City National Bank is pleased to
provide debt refinancing. The new revolving credit facility will
reduce the margin on the company's debt at a time of interest rate
volatility and ensure SONG delivers superior value for shareholders
into the future."
For more information:
Hipgnosis Song Management
Merck Mercuriadis
Chris Helm
Giles Croot (Media) +44 (0)20 4542 1511
Rufina Pavry (Investors ) +44 (0)20 4542 1530
Singer Capital Markets - Joint Corporate
Broker
James Moat / James Maxwell / Alex Emslie
(Corporate Finance)
Alan Geeves / James Waterlow / Sam Greatrex
(Sales) +44 (0)20 7496 3000
J.P. Morgan Cazenove - Joint Corporate Broker
William Simmonds / Jérémie Birnbaum
(Corporate Finance)
James Bouverat (Sales) +44 (0)20 7742 4000
RBC Capital Markets - Joint Corporate Broker
Elliot Thomas / Max Avison (Corporate Finance)
Lisa Tugwell / Anastasia Mikhailova (Sales) +44 (0)20 7635 4000
Ocorian - Company Secretary & Administrator
Lorna Zimny +44 (0) 28 9693 0222
+44 (0)7771 978220;
FTI Consulting +44 (0)7809 411882;
Neil Doyle/ Paul Harris/ Laura Ewart +44 (0)7761 332646
The Outside Organisation
Alan Edwards / Nick Caley +44 (0)7711 081 843
All US music publicity enquiries
Fran Defeo +1 917 767 5255
Notes to Editors
About Hipgnosis Songs Fund
Hipgnosis, which was founded by Merck Mercuriadis, is a Guernsey
registered investment company established to offer investors a
pure-play exposure to songs and associated musical intellectual
property rights. The Company has raised a total of almost GBP1.3
billion (gross equity capital) through its Initial Public Offering
on 11 July 2018, and subsequent issues in April 2019, August 2019,
October 2019, July 2020, September 2020, February 2021 and July
2021. In September 2019, Hipgnosis transferred its entire issued
share capital to the Premium listing segment of the Official List
of the FCA and to the London Stock Exchange's Premium segment of
the Main Market, and in March 2020 became a constituent of the FTSE
250 Index. Since April 2021, the Company has been resident in the
UK for tax purposes and is recognised as an investment trust under
applicable HMRC regulations.
About Hipgnosis Song Management Limited
The Hipgnosis Songs Fund's Investment Adviser is Hipgnosis Song
Management Limited, which was founded by Merck Mercuriadis, former
manager of globally successful recording artists, such as Elton
John, Guns N' Roses, Morrissey, Iron Maiden and Beyoncé, and hit
songwriters such as Diane Warren, Justin Tranter and The-Dream, and
former CEO of The Sanctuary Group plc. The Investment Adviser has
assembled an Advisory Board of highly successful music industry
experts which include award winning members of the artist,
songwriter, publishing, legal, financial, recorded music and music
management communities, all with in-depth knowledge of music
publishing. Members of Hipgnosis Song Management Limited Advisory
Board include Nile Rodgers, The-Dream, Giorgio Tuinfort, Starrah,
David A. Stewart, Poo Bear, Bill Leibowitz, Ian Montone and Rodney
Jerkins.
About City National Bank
With $91.2 billion in assets, City National Bank provides
banking, investment and trust services through 68 branches,
including 22 full-service regional centers, in Southern California,
the San Francisco Bay Area, Nevada, New York City, Nashville,
Atlanta, Washington, D.C. and Miami*. In addition, the company and
its investment affiliates manage or administer $83.0 billion in
client investment assets. City National is a subsidiary of Royal
Bank of Canada (RBC), one of the world's leading diversified
financial services companies. RBC serves more than 17 million
personal, business, public sector and institutional clients through
offices in Canada, the United States and 27 other countries. For
more information about City National, visit the company's website
at cnb.com.
*City National Bank does business in Miami and the state of
Florida as CN Bank.
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