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Hipgnosis Songs Fund Ltd on Monday said it had successfully refinanced its debt facilities.
The Guernsey-registered music IP investment and song management company has signed a $700 million revolving credit facility, which will run for five years until September 2027.
The facility will be used to refinance the company's pre-existing revolving credit facility and for ‘working capital purposes’.
Interest on the new facility charged is based on the secured overnight financing rate, 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%.
The SOFR is a benchmark interest rate for dollar-denominated derivatives and loans.
Hipgnosis also said it was 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.
Chief Executive Officer & Founder Merck Mercuriadis 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 revolving credit facility is very encouraging for Song and will deliver value to our shareholders as income from our portfolio of songs increases,’ Mercuriadis added.
Shares in Hipgnosis were trading 2.9% higher at 91.68 pence each
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