Moody's rates WMG notes Ba3

Moody's Investors Service said it assigned a Ba3 rating to WMG Acquisition Corp.'s proposed €200 million senior secured notes.

WMG Holdings Corp.'s B1 corporate family rating and existing secured and unsecured debt ratings are unchanged.

The outlook remains stable.

The proceeds from the notes offering will be used to prepay about €34.5 million of the existing €345 million outstanding 4 1/8% senior secured notes due 2024 via the call feature and help finance the acquisition of E.M.P. Merchandising Handelsgesellschaft mbH for €155 million, Moody's explained.

The transaction modestly increases the company's pro forma total debt-to-EBITDA to 5.3x from 5.1x, the agency said.

WMG is expected to benefit from the scale of EMP's pan-European e-commerce platform, which is the largest in the E.U., Moody's said.

The ratings reflect an expectation that WMG Holdings' parent, Warner Music Group Corp., will operate with financial leverage as measured by total debt-to-EBITDA in the 4.75x to 5.75x range over the rating horizon, the agency said.

The ratings also consider seasonal and cyclical recorded music revenue and low visibility into results of upcoming release schedules, Moody's said.

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