Warner Music selling $935 million notes in two tranches Wednesday

By Paul A. Harris

Portland, Ore., March 26 - Warner Music Group, issuing via WMG Acquisition Corp., plans to price $935 million of high-yield notes Wednesday following a late-morning conference call with investors, according to a syndicate source.

The Rule 144A and Regulation S for life deal includes a $275 million tranche of eight-year senior secured notes and a $660 million tranche of eight-year senior unsecured notes.

The notes in both tranches become callable after three years at par plus 75% of the coupons. A special call feature allows the issuer to redeem 10% of the secured notes at 103 during the non-call period.

The notes in both tranches feature 40% equity clawbacks during the non-call periods and 101% poison puts.

Credit Suisse Securities (USA) LLC, Barclays, UBS Investment Bank, Macquarie Capital and Nomura are the joint bookrunners.

The New York-based music content company plans to use the proceeds to refinance its existing senior unsecured notes.

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