S&P ups Alchemy Copyrights

S&P said it raised its ratings on Alchemy Copyrights LLC (Concord) and its secured debt to BB- from B+.

“Tailwinds in the music industry will continue to drive strong operating performance for Concord for the next few years. The global recorded music industry continues to grow annually since its inflection point in 2015 and after more than a decade of declines since the early 2000. This growth has benefited music labels and publishers such as Concord,” S&P said in a press release.

Additionally, “We forecast Concord will continue to pursue growth opportunities either through direct acquisitions or indirect investments as it looks to grow its portfolio of music assets under ownership/management. We expect these investments could be debt-financed and adjusted leverage could increase up to the 5x area. We also forecast FOCF to debt to remain in the 10% range for the next 12 months as we continue to forecast healthy cash flow conversion from EBITDA,” the agency said.

The outlook is stable.

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