Homburger advises MusicBird on financing deal with MUFG Bank
A team from Homburger, led by Daniel Haeberli (financing, pictured) and included Fabrice Eckert (financing) and Stefan Otsterhelt (Tax), has offered legal counsel to MusicBird in relation to various financing aspects. MusicBird, established in 2020, has set its sights on building a diverse global portfolio of music rights. With a vision to become the preferred partner for record labels, composers, and musicians, MusicBird aims to revolutionize the monetization of music rights through the utilization of big data analytics.
On January 27, 2023, MusicBird entered into a credit agreement with MUFG Bank, acting as the administrative agent, joint lead arranger, sole bookrunner, and foreign exchange provider. This agreement, in the form of an asset-based credit facility, serves to fund the continued expansion of MusicBird’s business. Homburger played a pivotal role in advising MusicBird on all legal matters pertaining to Swiss law in connection with the financing agreement with MUFG Bank.
The credit facility is primarily based on the projected cash flow generated by three specific music catalogues. To ensure the ring-fencing of these valuable music catalogues and the royalties derived from them, the assets were transferred to a newly established Swiss subsidiary named MusicBird Rights. Under the terms of the credit agreement, MusicBird Rights was required to create a security interest in the music catalogues. Establishing this unique security interest presented challenges, particularly due to the diverse jurisdictional laws governing the music catalogues. Additionally, MusicBird had to effectively coordinate the new credit agreement with its existing financing arrangement in Switzerland involving its shareholders.