Peter Kafka

Recent Posts by Peter Kafka

Warner Music Doubles Up on Debt: Another EMI Bid Coming?

green_day_Turns out not everyone is convinced that big music is dying: Investors have snapped up $1.1 billion in debt issued by Warner Music Group–double the amount the company had originally planned on issuing when it announced the offering yesterday morning.

Details on the new notes, which mature in 2016, are available here, and there’s more fine print here. But the broad strokes are that the offering will allow Warner to bolster its balance sheet, and remove investors’ concerns about its ability to finance existing debt load. Those concerns had prompted Warner to dump its dividend a year ago–long before dividend-slashing became trendy.

But the most interesting part of the offering, per Pali Research analyst Rich Greenfield, is language allowing Warner to redeem the notes early “if a major music transaction occurs.” Translation: Warner still isn’t giving up on the idea of combining with EMI Music Group, a merger the two labels have been trying to pull off for nearly a decade.

Hey! Also, there’s a new album out from Green Day, one of Warner’s biggest acts. I’d show you  a YouTube clip, but Warner (WMG) and Google’s (GOOG) video site are still sparring, so the label’s videos aren’t on the world’s largest video site. So here’s Green Day 1.0 (per “High Fidelity”): Stiff Little Fingers, circa 1980:

Latest Video

View all videos »

Search »

I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik