Live Nation To Raise $800 Million Through Bond Issuance

It’s almost been two months since the industry had seen the first event cancellation, and while there’s the occasional glimpse of hope that small-scale events may come back soon – think Spain’s plans to allow open air events with a 800-person capacity, the impact to the events industry is far from contained. Consequently, as revenues dip to zero, companies over the past weeks have come up with corporate plans to tackle the situation. Most recently, Live Nation has announced plans to raise $800 million through a debt issuance.

Live Nation Entertainment Inc. Historical Stock Price (YTD)
Live Nation Entertainment Inc. Historical Stock Price (YTD)

Specifically, the industry giant plans to issue 7-year senior secured notes in a private deal. The debt prospectus also reveals that proceeds will be used for general corporate purposes. Shares rose 2.5% pre-market on the back of the announcement, but remain around the $36.90 level (at the time of writing). This marks a 48% drop from its 52-week high of $76.60 back in mid-February. Back in March, the company’s market value had plummeted by $1.8 billion in just one day as shares dropped by a shocking 16.5%.

The announcement comes around a month after the company had announced the completion of a $120 million revolving credit facility. On top of this, Live Nation had also implemented a $500 million cost reduction and cash management program, which entailed salary cuts for CEO Michael Rapino and other top executives.

Clearly, no one in the industry is immune. Just yesterday, Eventbrite had recorded its worst day in a year as stocks plunged 23% as the U.S.-based events management company announced a $146.5 million net loss since the start of the year.

Eventbrite Inc. Historical Stock Price (YTD)
Eventbrite Inc. Historical Stock Price (YTD)

Yet, as they say, when you hit rock bottom, the only way is up. With companies jumping on board with organising online events and small gatherings such as open-air and drive-in concerts, ticket sales may finally start recovering. But it’ll unfortunately be long before corporate optimism returns to pre-coronavirus levels.