Warner To Sell $1.05b in Junk Bonds Before Sale

Bloomberg.com reported (7/6) that Warner Music Group (WMG) is planning to sell $1.05 billion of high-yield bonds before the company is taken over. The bonds being offered will consist of:

• $150 million 9.5% senior secured notes by WMG Acquisition Corp due June 2016
• $695 million senior debt due Oct. 2018 by WMG Acquisition Corp
• $200 million senior bonds due Oct. 2019 by WMG Holdings Corp.

The Wall Street Journal notes 7/13 that the price guidance on the bonds has been set at, “weaker-than-expected levels.” WSJ notes, “The talk on the secured senior notes of $150 million is at a price of 104 to 104.5, while the $695 million notes due Oct. 1, 2018 are at a yield of 11.55% to 11.75%, and the $200 million senior notes are at 13.25% to 13.75%.”

Bloomberg Business Week explains the background behind the sale terms. “The all-cash acquisition by U.S. billionaire Blavatnik’s Access Industries Holdings LLC is valued at $3.3 billion and will be funded with committed financing from Credit Suisse Group AG and UBS AG and equity funding from Access. Warner Music’s shareholders agreed to the acquisition at a special meeting for $8.25 per share in cash, according to a statement distributed by Marketwire.”