Getty seeks to raise $100m in new debt to bulk up stock photo business
Published 13/09/2015 | 02:30
Getty Images is seeking to raise as much as $100m (€88m) in new debt as it attempts to bulk up its stock photo business, according to two people with knowledge of the matter. The firm was set up by Irish passport holder Mark Getty, part of the Getty oil dynasty. In 2006, it spent over €110m to buy Jerry Kennelly's Kerry-based image bank Stockbyte.
The seller of archived photographs has told some prospective investors it will ask them to buy between $50m and $100m of new secured obligations, said the people, who asked not to be named because the information is private. Getty hasn't determined a timeline for the sale, the sources said.
The company, which is controlled by the Carlyle Group LP, told investors during a private earnings call last month that it had hired Guggenheim Securities LLC to explore a debt deal, people with knowledge of the arrangement told Bloomberg. The company would use the proceeds for "key growth initiatives," it said.
Getty also said in July that its mid-stock photo business continued to struggle in the second quarter while other segments improved, people with knowledge of the situation said. The company doesn't publicly disclose its earnings because it is privately held.
Kylie Taylor, a spokeswoman for Seattle-based Getty, Randy Whitestone, a spokesman for Washington-based Carlyle, and Anthony Lacavaro, a spokesman for Guggenheim, declined to comment. The new debt, whether structured as loans or bonds, would rank above the company's $550m of unsecured notes.
Those securities have lost 5.1 cent to trade at about 35.8 cent on the dollar since August 12, when the company announced that it would explore an offering, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Some holders of the bonds have asked the company to exchange those securities for new ones at the same time that it is raising fresh capital, the people said. The new debt could remove the seniority of Getty's existing top-ranked $1.9bn of loans, they said.
Getty could rank the new debt either above or at the same level as the existing loans, depending on how it uses provisions in the credit agreement and adds additional assets to secure the loans.
Prices of the loans have fallen nearly 6.6 cent since the announcement to 62.8 cent on the dollar, according to Bloomberg.
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