Live Nation Announces $1.2B Debt Offering, Business Severely Affected by Covid-19 Crisis

Live Nation Entertainment (LYV) has announced that it priced and upsized an offering of $1.2 billion of its 6.5% senior secured notes due 2027.

The size of the notes offering has now been increased from the previously announced offering size of $800 million.

The notes will have an interest rate of 6.5% per annum and will be issued at a price equal to 100% of their face value. The closing date of the notes offering will be May 20, 2020, subject to customary closing conditions, says LYV.

“The company intends to use the net proceeds from the offering for general corporate purposes, including fees and expenses related to the offering” LYV stated.

On May 11 Berenberg analyst Brett Knoblauch reiterated his hold rating on the US venue operator and events promotor, while dropping his price target from $47 to $40.

“Live Nation’s business has been severely affected by the COVID-19 crisis” he writes. “While the company has taken numerous measures to preserve cash and shore up its balance sheet, we believe the impact will last for the entirety of 2020.”

According to Knoblauch, the biggest question is whether demand will return to pre-pandemic levels and what potential venue capacity constraints will be implemented by local government authorities.

He writes: “the biggest uncertainty for Live Nation is whether consumers will want to attend live events prior to when a vaccine or better treatment for COVID-19 is developed.”

Shares have sunk 48% on a year-to-date basis, although the stock’s Street consensus remains a cautiously optimistic Moderate Buy. The average analyst price target of $54 indicates 45% upside potential lies ahead. (See Live Nation stock analysis on TipRanks).

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