S&P rates WMG notes B+

S&P said it assigned its B+ issue-level rating and 3 recovery rating to WMG Acquisition Corp.'s proposed €200 million senior secured notes due 2026. The 3 recovery rating indicates an expectation of meaningful (50% - 70%; weighted average: 55%) recovery of principal in the event of a payment default.

WMG Acquisition plans to use the net proceeds from the issuance to fund its acquisition of EMP Merchandising and to redeem €34.5 million of its outstanding €345 million senior secured notes.

“Our B+ issuer credit rating on parent company Warner Music Group Corp. reflects the company's position as the third-largest global record company; its strong geographic diversity, with operations in more than 50 countries; its large and well-diversified portfolio of recordings and compositions across multiple genres, offset by its smaller market share compared to significantly larger peers,” S&P said in a news release.

“Global music streaming growth now outpaces declines in physical sales and digital downloads and we expect this trend to continue in 2019 and beyond.”

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