Dick Clark Productions (DCP) priced a $340 million of securities backed by the fees and revenues from the group’s most recognizable television broadcasts, including Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest.
This is the issuer’s first-ever securitization, according to Kroll Bond Ratings. The transaction’s $300 million of BBB-’ notes with a weighted average life of 6.5-years, yield 5.5% according to Bloomberg. The notes have a final maturity of October 25. 2044.
Technically the transaction is not a whole business structure because it only securitizes a portion, and not all, of the issuer’s operating assets. Similar to many whole business securitizations, however, the transaction is being used to refinance debt taken on through a leveraged buyout. The company’s capital structure consists of approximately $275 million of debt, all of which is being refinanced through this transaction. Additional proceeds will be used to pay a distribution to shareholders.
Other programs backing the deal are the American Music Awards, Academy of Country Music Awards , Golden Globe Awards and Billboard Music Awards. The Core Programs, with DCP as executive producer, have been broadcast for many years, with the exception of the BBMAs, which were produced by DCP for the first time in 2014.
For the 2014 fiscal year, these programs represent approximately 56% and 66% of the company’s revenues and gross profit, respectively. With the exception of the Billboard Music Awards, each core program has been broadcast on the same network for at least 15 years. License fees on these programs have grown to approximately $60 million in the fiscal year 2014 from $7.7 million in fiscal year 1992, according to the presale report.
DCP was taken private by Mosaic Media Group, later joined by Mandalay Entertainment Group, in 2002. In 2007, the company was acquired by RedZone and Six Flags, only to be sold again to an investment group led by Guggenheim Partners in September 2012.
In November 2013, DCP purchased 100% of the intellectual property and production rights related to the BBMAs from Prometheus Global Media.