- New debt said to be senior to some existing borrowings
- Some bondholders said to want exchanges for new securities
Getty Images Inc. is seeking to raise as much as $100 million in new debt as it attempts to bulk up its stock photo business, according to two people with knowledge of the matter.
The seller of archived photographs has told some prospective investors it will ask them to buy between $50 million and $100 million of new secured obligations, said the people, who asked not to be named because the information is private. Getty hasn’t determined a timeline for the sale, the people said.
The Carlyle Group LP-controlled company told investors during a private earnings call on Aug. 12 that it had hired Guggenheim Securities LLC to explore a debt deal, people with knowledge of the arrangement told Bloomberg last month. The company would use the proceeds for “key growth initiatives,” it said at the time.
Getty also said in July that its mid-stock photo business continued to struggle in the second quarter while other segments improved, people with knowledge of the situation said. The company doesn’t publicly disclose its earnings because it’s privately held.
Kylie Taylor, a spokeswoman for Seattle-based Getty, Randy Whitestone, a spokesman for Washington-based Carlyle, and Anthony Lacavaro, a spokesman for Guggenheim, declined to comment.
The new debt, whether structured as loans or bonds, would rank above the company’s $550 million of unsecured notes. Those securities have lost 5.1 cents to trade at about 35.8 cents on the dollar since Aug. 12, when the company announced that it would explore an offering, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Some holders of the bonds have asked the company to exchange those securities for new ones at the same time it’s raising fresh capital, the people said.
The new debt could remove the seniority of Getty’s existing top-ranked $1.9 billion of loans, the people said. Getty could rank the new debt either above or at the same level as the existing loans, depending on how it uses provisions in the credit agreement and adds additional assets to secure the loans.
Prices of the loans have fallen nearly 6.6 cents since the announcement to 62.8 cents on the dollar, according to data compiled by Bloomberg. They had traded above 90 cents as recently as February, the data show.