Just three months after Blackstone acquired the music assets of Hipgnosis Songs Fund (HSF) and merged them into Hipgnosis Songs Management (HSM), the hit-filled catalog of Red Hot Chili Peppers, Neil Young, Shakira and many other artists are backing securities that the company hopes will raise $1.47 billion.

Lyra Music Assets is HSM’s second asset-backed securitization (ABS), enabling a company to raise capital and pay interest with royalties generated by the catalog’s music publishing and recorded music rights. The assets in this catalog, acquired by Blackstone from the IPO HSF in July for $1.6 billion and folded into HSM, is now valued at $2.36 billion, according to the Kroll Bond Ratings Agency report. Proceeds from the securitization will be used to repay existing debt, fund ABS’ reserve account, pay transaction fees and go to general corporate purposes.

Acquired after a brief bidding war with Concord, the 45,000-song HSF catalog was built by the pioneering London Stock Exchange royalty fund that launched in 2018 and raised around $2.2 billion to acquire music rights from dozens of classic artists and successful producers. In 2023, with HSF’s share price struggling, investors voted in favor a strategic review which would weigh the options to improve shareholder value. That review painted a damning picture of HSF’s operations and resulted in the sale of the fund’s catalog and resignation of HSM’s chairman, Merck Mercuriadisin July.

Through all the drama, Blackstone ended up with a catalog of such premium artists as Rick James, Enrique Iglesias, Steve Winwood and Pretenders‘ Chrissie Hyndewhere the tracks have an average age of approximately 19 years. But there are currently four lawsuits involving assets in the directory: the ongoing dispute with Barry Manilow regarding additional purchase price; a claims of copyright infringement over Mariah Careys “All I Want For Christmas Is You”; a dispute over co-producer royalties from Timbaland recordings; and the so-called “dembow” trial came Jamaican duo Steely & Clevie claiming that more than 1,800 reggaeton songs illegally copied the rhythm of the duo’s 1989 song “Fish Market.”

Lyra Music Assets is the latest in a series of royalty-based securitizations that enable music companies to use their massive catalogs to raise additional capital. As Notice board noted earlier this year, securitizations have grown in popularity as exchange-traded royalty funds – HSF and Round Hill Music Royalty Fund – have fallen out of favor. HSM’s former ASB, Hipgnosis Music Assets 2022-1was backed by nearly 1,000 songs by artists such as Justin Timberlake, Nelly Furtado and Leonard Cohen. Harmony launched an ABS in October that tried to raise $850 million and also did one $1.65 billion ABS by 2022. Other companies to tap the securitization market include HarbourView Equity Partners, Cobalt anad Chord Music Partners.