Promotions company Live Nation plans to raise $1.2bn through a bond to strengthen its balance sheet to get it through the coronavirus outbreak that has hit almost 75,000 of its shows around the world.
The company, led by chief executive Michael Rapino, initially reported an $800m offering but then lifted the issue to $1.2bn. Live Nation corporate bond consists of a senior secured note with an interest rate of 6.5% that will be due on 2027.
The notes will be secured by a first-priority lien on the company’s assets, which means they have the highest claim among creditors if the company files for bankruptcy. Also, the offering’s due date was set on 20 May, the date when the company will announce the results of the sale.
Around 74,000 Live Nation and Ticketmaster events, including Dua Lipa’s UK tour (pictured), and Pussycat Dolls and Slipknot concerts, have been affected by the coronavirus health emergency.
The company has published a ticket refund plan in light of the contingency that includes full refunds or 150% credit for canceled-event tickets and rescheduled active tickets or potential refunds for those that have been rescheduled.
Meanwhile, a high percentage of attendants have reportedly stick to their tickets instead of seeking refunds, in hopes that they can eventually get to see their favorite performers, once the company manages to resume the events.
Live Nation (LYV) shares have had a rough year, accumulating a 47.6% loss year-to-date compared to a 1.22% loss recorded by the Nasdaq Composite during the same period. Meanwhile, the stock closed yesterday’s session at $37.45, down 1.86%, amid worries that a second wave of the virus might halt the company’s efforts to resume its activities.
The Beverly Hills-based entertainment company reported its financial results for the first quarter of 2020 on 28 April, posting a $185m loss, deepening from the $52m loss it reported a year ago.