Justin Bieber, Shakira royalties to back bonds sold by Recognition
The Blackstone Inc.-backed business, which operated as Hipgnosis until March, plans to sell bonds secured by publishing and recording rights from more than 47,000 compositions and recordings, according to a Kroll Bond Rating Agency report. More than 76% of the music was released over a decade ago.
As part of the proposed bond sale, Recognition also plans to contribute more music assets, independently valued at $340.8 million. That would bring the total valuation of the collateral being put up to about $2.95 billion, based on expected asset cash flows.
Proceeds from the sale would be used to repay existing debt, help fund reserves and transaction costs, as well as for other general corporate purposes, according to Kroll, which has assigned a preliminary grade of A to the deal's A-2 class. The deal is the first music ABS to be rated by Fitch and S&P. The preliminary credit ratings, which will sit alongside its existing rating from Kroll, are single-A across the board.
In recent years, the growing popularity of streaming services has helped bolster royalty cashflows, supporting exotic bonds tied to music assets. Streaming revenue from recorded music swelled to $20.4 billion in 2024 from about $1.8 billion a decade ago, Kroll notes, citing the International Federation of the Phonographic Industry's 2025 Global Music Report.
London-headquartered Recognition has been tapping the song-backed debt market for some time, including as recently as the end of last year, when it sold $1.47 billion of notes. Its inaugural music royalty ABS was in 2022, when it sold $221.65 million of debt.
The business was founded in 2018 by long-time music industry executive Merck Mercuriadis to buy song rights and was acquired by Blackstone affiliates in 2021. Mercuriadis had spent decades managing artists like Elton John and Beyonce before founding Hipgnosis.
Barclays Plc is acting as lead bookrunner on Recognition's latest proposed music royalty ABS. The rights in Recognition's music catalog are administered by several organizations, including Sony Music Publishing, Kobalt and Universal Music Publishing Group.
Music royalty ABS volume so far this year is around $1.7 billion, according to data compiled by Bloomberg News. –BLOOMBERG
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RECOGNITION Music Group, which manages a broad catalog of popular music, is selling $372 million of bonds backed by royalties from the likes of Red Hot Chili Peppers, Journey, Justin Bieber (picture) and Shakira. The Blackstone Inc.-backed business, which operated as Hipgnosis until March, plans to sell bonds secured by publishing and recording rights from more than 47,000 compositions and recordings, according to a Kroll Bond Rating Agency report. More than 76% of the music was released over a decade ago. As part of the proposed bond sale, Recognition also plans to contribute more music assets, independently valued at $340.8 million. That would bring the total valuation of the collateral being put up to about $2.95 billion, based on expected asset cash flows. Proceeds from the sale would be used to repay existing debt, help fund reserves and transaction costs, as well as for other general corporate purposes, according to Kroll, which has assigned a preliminary grade of A to the deal's A-2 class. The deal is the first music ABS to be rated by Fitch and S&P. The preliminary credit ratings, which will sit alongside its existing rating from Kroll, are single-A across the board. In recent years, the growing popularity of streaming services has helped bolster royalty cashflows, supporting exotic bonds tied to music assets. Streaming revenue from recorded music swelled to $20.4 billion in 2024 from about $1.8 billion a decade ago, Kroll notes, citing the International Federation of the Phonographic Industry's 2025 Global Music Report. London-headquartered Recognition has been tapping the song-backed debt market for some time, including as recently as the end of last year, when it sold $1.47 billion of notes. Its inaugural music royalty ABS was in 2022, when it sold $221.65 million of debt. The business was founded in 2018 by long-time music industry executive Merck Mercuriadis to buy song rights and was acquired by Blackstone affiliates in 2021. Mercuriadis had spent decades managing artists like Elton John and Beyonce before founding Hipgnosis. Barclays Plc is acting as lead bookrunner on Recognition's latest proposed music royalty ABS. The rights in Recognition's music catalog are administered by several organizations, including Sony Music Publishing, Kobalt and Universal Music Publishing Group. Music royalty ABS volume so far this year is around $1.7 billion, according to data compiled by Bloomberg News. –BLOOMBERG
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