23rd Jul 2020 12:00
(Alliance News) - Hipgnosis Songs Fund Ltd on Thursday said it has entered into an agreement with a syndicated group of lenders - with JPMorgan Chase & Co as lead arranger - to increase its revolving credit facility from GBP150 million to USD400 million, about GBP314.6 million.
The music catalogue investment firm said currency has been amended from pound sterling to US dollars as the majority of its catalogues are acquired in US dollars and the majority of its income is received in the same currency.
Hipgnosis said financial covenants under the facility includes that the loan to value must not exceed 40%, the company's cash and facility headroom must be greater than an estimate of one year's total cost, and total indebtedness of the company as a multiple of the net publisher share of income from its catalogues must not exceed 4.5x.
Net publisher's share is the amount of royalties received by a music publisher minus any amounts of those royalties that have to be paid to writers, performers and anyone else who receives a share.
The company said its total borrowings will not exceed 30% of its net asset value and the increased facility will be used in line with its proposed financing strategy. It added that it will "substantially" invest the net proceeds of the recent GBP233.4 million equity fundraise before drawing further leverage.
Shares in Hipgnosis were trading up 0.4% at 116.49 pence each on Thursday in London.
By Ife Taiwo; [email protected]
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