(Sharecast News) - Music intellectual property investor Hipgnosis Songs Fund has agreed to increase its revolving credit facility from £150m to $400m (£314.54m), with a syndicated group of lenders led by JPMorgan Chase Bank.
The FTSE 250 company said the increased facility would be used in line with its proposed financing strategy, and in accordance with its investment policy, total borrowings would not exceed 30% of its net asset value.
In addition to the increase of the commitment, certain terms of the facility had been amended, including that drawings would be denominated in US dollars.
"This will provide a partial natural hedge against foreign exchange movements, as the majority - 89% as at 31 March - of the company's catalogues are acquired in dollars, and the majority of income is received in dollars," the board explained in its statement.
It added that the facility included three financial covenants, with the first being that the loan-to value, calculated as the total indebtedness of the company divided by the gross value of its catalogues, could not exceed 40%.
The second was that the firm's cash and facility headroom needed to be greater than an estimate of one year's total costs, and the third was that its total indebtedness as a multiple of the net publisher share of income from its catalogues could not exceed 4.5x.
"The company will substantially invest the net proceeds of the recent equity fund raise before drawing further leverage," the board added.
At 1029 BST, shares in Hipgnosis Songs Funds were up 0.43% at 116.49p.
Hipgnosis Songs (SONC)
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