Chord Music Leverages Its Catalogs Into a $500M ABS

Photo Credit: Florencia Viadana

Chord Music is sponsoring $500 million in asset-backed securities (ABS) from a portfolio of music rights featuring Morgan Wallen, ZZ Top, and more.

Chord Music Partners, born from a partnership between Dundee Partners and KKR, has announced plans to sponsor $500 million in asset-backed securities (ABS) based on a portfolio of music, publishing, and master recording rights. Valued at roughly $830 million, the entire catalog consists of over 3,750 works, with sound recording rights making up 66% of the revenue.

Three major sub-catalogs account for over 54% of the royalty income: independent rap duo $uicideboy$ at 23.3%, country star Morgan Wallen at 15.8%, and OneRepublic’s Ryan Tedder at 15.3%. Other major artists in the portfolio include Diplo, Twenty One Pilots, and ZZ Top.

The Series 2026-1 Notes will be issued by the newly established Canon Music Issuer Trust and have received a preliminary A rating from KBRA. Only one tranche of notes will be issued, with an anticipated repayment date of May 2031 and a final maturity date of May 2076.

The catalog has a weighted average age of about 10 years; music released 10 years ago comprises more than 46% of the catalog, while music released more than five years ago makes up 74%.

Multiple administrators of collective management organizations, including The Orchard, Republic Recordings, and Universal Music Group, administer the rights in the catalog. Universal Music Investments is the deal’s manager, while Redding Ridge Asset Management is the backup manager.

Notably, several features in the structure of the deal boost credit to the notes, including an initial over-collateralization level of 39.8%.

Canon Music Issuer Trust also benefits from a debt service reserve account that covers six months of interest for the notes in each issued series. When the deal closes, the series will also benefit from a contingent liability reserve account amounting to $5 million to cover approximately 90% of the contingent liabilities that the deal would owe from this July through July 2031.