LOS ANGELES (CelebrityAccess) — Live Nation announced they have successfully completed their previously announced bond offering of $1.2 billion in senior secured debt to private investors.
The bond issuance, which started off at $800 million when it was announced last week, was quickly raised to $1.2bn due to what Live Nation described as “overwhelming demand.”
The bonds, which mature in 2027 at 6.5%, are senior secured notes and backed by equity and property owned by Live Nation.
Proceeds from the sale to private investors will be used for general corporate purposes, Live Nation said.
The new debt adds substantially to Live Nation’s already debt-heavy balance sheet. At the end of their first fiscal quarter in 2020, the company reported total long-term debt of roughly $5 bn with a debt to equity ratio that topped 4:1.
“This added liquidity will help bolster our already strong balance sheet, providing us with extra cushion to withstand any scenario well into 2021, as well as ample resources to capitalize on current innovations and ramp business up quickly when the time is right,” said Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.
“Artists’ endless creativity along with the enduring fan demand for concerts fuels our confidence that there is, and always will be, a strong future ahead for concerts and live events,” Rapino added.
In their notification to investors, Live Nation also shared a snapshot of the company’s current liquidity. According to Live Nation, their total cash and cash equivalents balance was $3.3 billion, which included $817 million of free cash and $2.0 billion of event-related deferred revenue.
They also touted a debt capacity of $963 million to draw on from different sources before accounting for the $1.2 billion raised from the bond issuance which would seem to put Live Nation in a stable position to weather even a long concert industry shutdown, even in light of the company’s breathtaking monthly burn rate of about $150 million which was revealed by Live Nation President Joe Berchtold in an investor call earlier this month.