Fitch starts BB- IDR for Warner Music

Fitch Ratings said it assigned initial ratings on Warner Music Group Corp. (WMG) and its subsidiaries as follows:

Warner Music Group: issuer default rating (IDR) of BB-; WMG Acquisition Corp.: IDR of BB-; secured rating of BB; subordinated rating of B+; WMG Holdings Corp.: IDR of BB- and unsecured rating of B.

The outlook is stable.

Fitch said the ratings are supported by the company's global footprint, diversified and established content library, solid credit metrics, leadership in the digital music space, adequate liquidity position and strong covenant package that gives creditors a substantial amount of control over leverage, dividends and event risk.

Credit concerns include substantial challenges facing the music industry related to piracy, as well as substantial returns of capital and dividends to the company's equity sponsors prior to its public offering, and Fitch's belief that equity returns will continue to be a major focus from the board of directors.

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