.sesac successfully completed a refinancing of its capital structure last month
SESAC successfully completed a refinancing of its capital structure last month, selling $530 million in bonds and gaining commitments for a $30 million revolving credit facility in a deal that was so well received by investors that it was oversubscribed by double, according to sources familiar with the deal.
Since the SESAC bond offering is secured, that means in the event of financial difficulties leading to a default and a Chapter 11 bankruptcy filing, the bond holder's loan would take priority before addressing any other money owed to vendors or even SESAC affiliates. The bonds are seven-year notes due in July 2026.
In addition to the bond offering, the company also received a commitment for a $30 million revolver, which, according to sources familiar with the deal, hasn’t yet been drawn down. With SESAC’s strong cash flow, the company likely uses its own cash to finance operation, instead of tapping the revolving credit facility.
In its most recent fiscal year, which both credit agencies label as 2019, EBITDA had a 29% ratio to revenue, but the company’s expense structure is not revealed in those reports. While SESAC's two main competitors, ASCAP and BMI, have had expense structures of about 10% in recent years, their expense costs ranged at about 12%-13% of revenue when they had a smaller revenue base.
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