Recording company Warner Music Group Corp. (NYSE:WMG) said Tuesday it will sell
$500 million in bonds with the aim of prepaying some secured debt and
finagling more friendly terms from senior lenders.
Aside from
balance sheet flexibility, Pali Capital Inc. analyst Rich Greenfield
noted that the refinance could give Warner Music more freedom to
revisit a combination with EMI Group plc in the coming years.
WMG
says it will volunteer to pay $300 million in principal of its senior
secured debt ahead of schedule and will reduce its revolver from $250
million to $150 million. The company wants to extend the maturity of
its term loans from 2011 to 2014, among other matters.
The new
notes would come due in 2016. Pali's Greenfield observed in a
Tuesday blog post that WMG could
redeem them before 2013 "if a major music transaction occurs."
"We take this to mean that WMG is looking
to give itself more flexibility should a merger with EMI present itself
over the next couple of years," he wrote. -
Chris Nolter
See Greenfield's blog post (subscription required)
See The Deal's coverage of the history between EMI and WMG
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