Recognition Music Group, the company formerly known as Hipgnosis Songs Management, is raising $372 million through an existing asset-backed security (ABS) that is collateralized by the music rights of Red Hot Chili Peppers, Journey, Justin Bieber and others.
The latest ABS, Lyra 2025-1, is Recognition’s fourth ABS deal. The Lyra ABS includes two series from 2024, Lyra 2024-2 and Lyra 2024-3, that raised $1.47 billion and ranked No. 5 on the biggest music business deals of 2024. The company also manages Hipgnosis Music Assets 2022-1 L.P., an ABS launched in 2022.
For Lyra 2025-1, Recognition Music Group added assets worth $341 million to the Lyra catalog, according to a Kroll Bond Rating Agency (KBRA) report. Including the additional assets, the Lyra catalog is worth $2.95 billion and has more than 47,000 compositions, master recordings and other assets. KBRA assigned an “A” preliminary rating.
The weighted average age of the catalog is approximately 21 years. Just 4% of the catalog is less than five years old, and 24% of the songs were released fewer than ten years ago. Nearly half (48%) of the royalties come from currencies other than the U.S. dollar. The U.K. represents 12% of the catalog’s royalties. Germany and France account for 5% and 4%, respectively. Most of the catalog’s recorded music revenues come from streaming.
As rising interest rates have made traditional debt less attractive, ABS deals have become an increasingly common financial tool for raising capital to fund acquisitions. In just the last month, Concord announced the closing of a $1.77 billion ABS and HarbourView Equity Partners closed a $500 million ABS, its second such deal in as many years. Both Concord and HarbourView did ABS deals in 2024, as did Influence Media.
