REG - Hipgnosis Songs Fund - Hipgnosis Songs Fund announces debt refinancing

Hipgnosis Songs FundAnnouncement

03/10/2022 07:00

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RNS Number : 4551B  Hipgnosis Songs Fund Limited  03 October 2022

LEI: 213800XJIPNDVKXMOC11

Hipgnosis Songs Fund Limited ("Hipgnosis" or the "Company")

Hipgnosis Songs Fund announces debt refinancing

3 October 2022

The Board of Hipgnosis Songs Fund Limited, the first UK listed investment
company offering investors a pure-play exposure to songs and associated
intellectual property rights, and its Investment Adviser, Hipgnosis Song
Management Limited, are pleased to announce the successful refinancing of the
Company's debt facilities.

The Company has entered into a new Revolving Credit Facility (RCF) with a
commitment of US$700 million which runs for five years until 30 September
2027.  The facility will be used to refinance, in full, the Company's
pre-existing RCF and for working capital purposes. In accordance with the
Investment Policy, any borrowings by the Company will not exceed 30% of the
value of the net assets of the Company.

Interest on the new facility charged is based on the Secured Overnight
Financing Rate (SOFR), 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%.

In addition, the Company is 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. The Company expects the completion of
this transaction shortly and will update the market in due course.

City National Bank was lead arranger and sole bookrunner for the new debt
facility with Truist Securities, Inc., MUFG Union Bank, N.A. and Fifth Third
Bank as co-leads.

As reported in the Company's Financial results, at 31 March 2022 the Company's
gross debt was $600 million.  The credit margin on this debt was 3.25% over a
floating rate based on the London Interbank Offered Rate (LIBOR).  Net debt
as a percentage of Operative NAV at 31 March 2022 was 25.4%.

Merck Mercuriadis, CEO and Founder of Hipgnosis Song Management 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 RCF is very encouraging for SONG and will deliver value to
our shareholders as income from  our portfolio of songs increases."

Chris Helm, CFO (SONG) of Hipgnosis Song Management said:

"Our new debt facility reduces the interest margin and provides added
flexibility and headroom for the Company.

"This is a strong commitment from both our new and old lenders and we would
like to thank them for their support."

Jim Irvin, Senior Vice President, City National Bank said:

"We are extremely optimistic about Hipgnosis Songs Fund's growth and
potential, which is why City National Bank is pleased to provide debt
refinancing.  The new revolving credit facility will reduce the margin on the
company's debt at a time of interest rate volatility and ensure SONG delivers
superior value for shareholders into the future."

For more information:

 Hipgnosis Song Management

 Merck Mercuriadis

 Chris Helm

 Giles Croot (Media)                                            +44 (0)20 4542 1511

 Rufina Pavry (Investors)                                       +44 (0)20 4542 1530
 Singer Capital Markets - Joint Corporate Broker                +44 (0)20 7496 3000

 James Moat / James Maxwell / Alex Emslie (Corporate Finance)

 Alan Geeves / James Waterlow / Sam Greatrex (Sales)
 J.P. Morgan Cazenove - Joint Corporate Broker                  +44 (0)20 7742 4000

 William Simmonds / Jérémie Birnbaum (Corporate Finance)

 James Bouverat (Sales)
 RBC Capital Markets - Joint Corporate Broker                   +44 (0)20 7635 4000

 Elliot Thomas / Max Avison (Corporate Finance)

 Lisa Tugwell / Anastasia Mikhailova (Sales)
 Ocorian - Company Secretary & Administrator                    +44 (0) 28 9693 0222

 Lorna Zimny
 FTI Consulting                                                 +44 (0)7771 978220; +44 (0)7809 411882; +44 (0)7761 332646

 Neil Doyle/ Paul Harris/ Laura Ewart
 The Outside Organisation                                       +44 (0)7711 081 843

 Alan Edwards / Nick Caley
 All US music publicity enquiries                               +1 917 767 5255

 Fran Defeo

Notes to Editors

About Hipgnosis Songs Fund

Hipgnosis, which was founded by Merck Mercuriadis, is a Guernsey registered
investment company established to offer investors a pure-play exposure to
songs and associated musical intellectual property rights. The Company has
raised a total of almost £1.3 billion (gross equity capital) through its
Initial Public Offering on 11 July 2018, and subsequent issues in April
2019, August 2019, October 2019, July 2020, September 2020, February
2021 and July 2021. In September 2019, Hipgnosis transferred its entire
issued share capital to the Premium listing segment of the Official List of
the FCA and to the London Stock Exchange's Premium segment of the Main
Market, and in March 2020 became a constituent of the FTSE 250
Index. Since April 2021, the Company has been resident in the UK for tax
purposes and is recognised as an investment trust under applicable HMRC
regulations.

About Hipgnosis Song Management Limited

The Hipgnosis Songs Fund's Investment Adviser is Hipgnosis Song Management
Limited, which was founded by Merck Mercuriadis, former manager of globally
successful recording artists, such as Elton John, Guns N' Roses, Morrissey,
Iron Maiden and Beyoncé, and hit songwriters such as Diane Warren, Justin
Tranter and The-Dream, and former CEO of The Sanctuary Group plc. The
Investment Adviser has assembled an Advisory Board of highly successful
music industry experts which include award winning members of the artist,
songwriter, publishing, legal, financial, recorded music and music management
communities, all with in-depth knowledge of music publishing. Members
of Hipgnosis Song Management Limited Advisory Board include Nile Rodgers,
The-Dream, Giorgio Tuinfort, Starrah, David A. Stewart, Poo Bear, Bill
Leibowitz, Ian Montone and Rodney Jerkins.

About City National Bank

With $91.2 billion in assets, City National Bank provides banking, investment
and trust services through 68 branches, including 22 full-service regional
centers, in Southern California, the San Francisco Bay Area, Nevada, New York
City, Nashville, Atlanta, Washington, D.C. and Miami*. In addition, the
company and its investment affiliates manage or administer $83.0 billion in
client investment assets. City National is a subsidiary of Royal Bank of
Canada (RBC), one of the world's leading diversified financial services
companies. RBC serves more than 17 million personal, business, public sector
and institutional clients through offices in Canada, the United States and 27
other countries. For more information about City National, visit the company's
website at cnb.com.

*City National Bank does business in Miami and the state of Florida as CN
Bank.

 

 

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