Warner Music Group Corp., the third-largest global music content company, is seeking $820 million in loans to support its acquisition of Parlophone Label Group and for general corporate purposes, according to a person with knowledge of the transaction.
Credit Suisse Group AG is arranging the financing, which includes a $710 million term portion and a $110 million piece, said the person, who asked not to be identified because the deal is private. The bank is hosting a lender meeting at 3 p.m. today in New York.
Warner is buying Parlophone, home to Coldplay, the Pet Shop Boys and Tina Turner, from Universal Music Group for about 487 million pounds ($752.6 million), Santa Monica, California-based Universal said in a Feb. 7 statement distributed by PR Newswire. Vivendi SA-owned Universal, the world’s biggest record company, has been selling EMI assets to meet antitrust requirements after receiving approval from the European Commission in September for its 1.2 billion-pound acquisition of EMI from Citigroup Inc.
The debt, to expire in seven years, will pay interest at 3.25 percentage points more than the London interbank offered rate with a 1 percent minimum on the lending benchmark, the person said. It will be offered to lenders at 99.5 cents on the dollar.
Lenders must let the bank know by May 1 if they will participate in the loan transaction, the person said.
Warner is also looking to use about $175 million of cash to redeem about $72 million of 6 percent senior notes due in 2021 and 6.25 percent bonds due in 2021, according to a regulatory filing today.