v3.26.1
Debt
 9 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt Debt
Debt Capitalization
As of June 30, 2026, our long-term debt consists of the following:
June 30,
2026		September 30,
2025
(in millions)
Revolving Credit Facility (a)$— $— 
Senior Term Loan A Facility due 2031 (b)
1,295 — 
Senior Term Loan B Facility due 2031 (b)
— 1,295 
2.750% Senior Secured Notes due 2028
371 381 
3.750% Senior Secured Notes due 2029
540 540 
3.875% Senior Secured Notes due 2030
535 535 
2.250% Senior Secured Notes due 2031
508 522 
3.000% Senior Secured Notes due 2031
800 800 
Mortgage Term Loan due 203316 17 
Total debt, including the current portion4,065 4,090 
Premium less unamortized discount and unamortized DFCs(21)(27)
Total Acquisition Corp. long-term debt, including the current portion, net$4,044 $4,063 
Beethoven Credit Agreement (c)
370 — 
Tempo Asset-Based Notes due 2050 (d)
311 311 
Unamortized discount and unamortized DFCs(15)(9)
Total other long-term debt, including the current portion, net
$666 $302 
Total long-term debt, including the current portion, net$4,710 $4,365 
______________________________________
(a)Reflects $350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2026 and September 30, 2025. There were no loans outstanding under the Revolving Credit Facility as of June 30, 2026 and September 30, 2025.
(b)On March 11, 2026, Acquisition Corp. borrowed all of the Term Loan A Facility to repay all of the outstanding loans under the Term Loan B Facility.
(c)Reflects $750 million of commitments under the Beethoven Credit Agreement. There were $370 million in loans outstanding under the Beethoven Credit Agreement at June 30, 2026. Loans outstanding under the Beethoven Credit Agreement are secured only by certain music rights owned by Beethoven JV 1, LLC, a Delaware limited liability company (“Beethoven”), and are nonrecourse to the Company and its subsidiaries, other than Beethoven.
(d)The Tempo Asset-Based Notes due 2050 are secured only by certain music rights owned by Tempo Music Holdings, LLC (“Tempo Music”) and are nonrecourse to the Company and its subsidiaries, other than Tempo Music.
Acquisition Corp. Long-Term Debt
The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp. Acquisition Corp. is party to and the borrower under a $1,295 million term loan A facility and a $350 million revolving facility, pursuant to an amended and restated credit agreement dated March 11, 2026 (the “Credit Agreement”), with JPMorgan Chase Bank NA, as administrative agent, and the other financial institutions and lenders from time to time party thereto. Additionally, as of June 30, 2026, Acquisition Corp. had issued and outstanding the 2.750% Senior Secured Notes due 2028, the 3.750% Senior Secured Notes due 2029, the 3.875% Senior Secured Notes due 2030, the 2.250% Senior Secured Notes due 2031 and the 3.000% Senior Secured Notes due 2031 (together, the “Acquisition Corp. Notes”).
All of the Acquisition Corp. Notes are guaranteed by all of Acquisition Corp.’s domestic wholly-owned subsidiaries. The guarantee of the Acquisition Corp. Notes by Acquisition Corp.’s domestic wholly-owned subsidiaries is full, unconditional and joint and several. The secured notes are guaranteed on a senior secured basis.
The Company and Holdings are holding companies that conduct substantially all of their business operations through Acquisition Corp. Acquisition Corp. and its subsidiaries are not currently restricted from distributing funds to the Company and Holdings under the indentures for the Acquisition Corp. Notes or the Credit Agreement for the Acquisition Corp. credit facilities, including the Revolving Credit Facility (as defined below) and the Tranche A Term Loans (as defined below).
The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Tranche A Term Loans as of June 30, 2026.
Other Long-Term Debt
The Company holds approximately $311 million of asset-based securities due November 2050 (“Asset-Based Notes”) issued by a subsidiary of Tempo Music, which are secured only by certain music rights owned by Tempo Music and are nonrecourse to the Company and its subsidiaries, other than Tempo Music. These notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62% until November 30, 2027, with higher interest rates thereafter. Principal and interest are payable in equal semi-annual installments. As of June 30, 2026, Tempo Music is in compliance with the covenants under the Asset-Based Notes.
Additionally, WMG BC Holdco LLC (“WMGCo”), a wholly-owned indirect subsidiary of the Company, and BCSS W JV Investments (B), L.P. (“BainCo”), a wholly-owned indirect subsidiary of Bain Capital Special Situations, LP, operate Beethoven, which is party to a Credit and Security Agreement (the “Beethoven Credit Agreement”), dated as of June 29, 2025, with the Bank of New York Mellon, as administrative agent for the Lenders and as collateral agent for the Secured Parties (in each case, as defined in the Beethoven Credit Agreement) pursuant to which the Lenders have agreed to extend up to $500 million in commitment amounts to Beethoven Financing 1, LLC, a Delaware limited liability company and wholly-owned indirect subsidiary of Beethoven, as the initial borrower (the “Initial Borrower” and, together with each additional borrower from time to time party thereto, the “Borrowers”) (the “Beethoven Credit Facility”). The obligations of the Borrowers under the Beethoven Credit Agreement are (a) secured by the Borrowers with a first priority security interest in all of their respective assets and (b) guaranteed by Beethoven Holdings 1 LLC, a Delaware limited liability company and a wholly-owned direct subsidiary of Beethoven and the direct parent of the Initial Borrower, as the initial guarantor (together with the additional guarantors from time to time party thereto, the “Guarantors”) with a first priority security interest in all of the Guarantors’ respective assets. The advances under the Beethoven Credit Agreement shall bear interest at the rates described below under “—Interest Rates.” The Beethoven Credit Agreement contains customary affirmative and negative covenants for this type of facility, and the ability, subject to the consent of the Lenders, to increase the size of the facility to $750 million. There were $370 million of loans outstanding under the Beethoven Credit Agreement at June 30, 2026. As of June 30, 2026, the Initial Borrower is in compliance with the covenants under the Beethoven Credit Agreement. On May 5, 2026, the Lenders, pursuant to an amendment to the Beethoven Credit Agreement (the “Credit Agreement Amendment”), agreed to increase the aggregate commitments under the Beethoven Credit Agreement from $500 million to $750 million. The Credit Agreement Amendment also provides that, subject to the consent of the Lenders, the Borrowers may further increase the size of the facility up to an aggregate commitment of $950 million.
On February 4, 2026, WMGCo entered into an amendment (the “Amendment”) to a Master Operations and Economics Agreement, dated as of June 29, 2025 (as amended from time to time, the “Master Operations and Economics Agreement”), by and among WMGCo, BainCo, and certain affiliates of the foregoing parties. Pursuant to the Amendment, WMGCo and BainCo have committed to increase their respective initial equity commitment amounts by $100 million each.
Fiscal 2026 Transactions
March 2026 Credit Agreement Amendment
On March 11, 2026, Acquisition Corp. entered into the Credit Agreement among Acquisition Corp., as borrower, the guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Credit Agreement amends and restates in its entirety the Credit Agreement, dated as of November 1, 2012, among Acquisition Corp., JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto, and incorporates, as amended and restated, the revolving credit facility provided under the Credit Agreement, dated as of January 31, 2018, among Acquisition Corp., JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto.
The Credit Agreement provides for a $350 million revolving credit facility (the “Revolving Credit Facility”) and a $1,295 million term loan A facility (the “Tranche A Term Loans”). Subject to certain conditions, Acquisition Corp. may obtain increases in the commitments under the Revolving Credit Facility and incur incremental term loans. As of June 30, 2026, Acquisition Corp. had borrowed all of the Tranche A Term Loans to repay Acquisition Corp.’s term loan B facility. No amounts were drawn under the Revolving Credit Facility as of June 30, 2026.
In connection with the Credit Agreement, the Company recorded a loss on extinguishment of debt of approximately $7 million for the nine months ended June 30, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs. The use of proceeds from the $1,295 million Tranche A Term Loans has been presented in the accompanying consolidated statement of cash flows. The Company recognized deferred financing costs of $4 million associated with the amendment.
Interest Rates
The loans under the Credit Agreement bear interest at Acquisition Corp.’s election at a rate equal to (i) a forward-looking term rate based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“SOFR”), subject to a zero floor, plus the applicable margin, or (ii) an alternative base rate (“ABR”), which is the highest of (x) the corporate base rate established by the administrative agent from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR (as defined in the Credit Agreement) plus 1.0% per annum, in each case, subject to a 1.00% floor plus the applicable margin. The applicable margin for the Tranche A Term Loans ranges from 1.250% to 1.625% per annum for SOFR loans and from 0.250% to 0.625% per annum for ABR loans, in each case based upon Acquisition Corp.’s issuer credit ratings. The applicable margin for borrowings under the Revolving Credit Facility ranges from 1.125% to 1.750% per annum for SOFR loans and 0.125% to 0.750% per annum for ABR loans, in each case based upon Acquisition Corp.’s issuer credit ratings.
Based on the Applicable Debt Rating of BBB- at June 30, 2026, the applicable margin for SOFR loans and risk-free rate loans would be 1.250%; the applicable margin for ABR loans would be 0.250% in the case of Initial Revolving Loans (as defined in the Credit Agreement); the applicable margin for SOFR loans and risk-free rate loans would be 1.375%; and the applicable margin for ABR loans would be 0.375% in the case of the Tranche A Term Loan. If there is a payment default at any time, then the interest rate applicable to overdue principal will be the rate otherwise applicable to such loan plus 2.0% per annum. Default interest will also be payable on other overdue amounts at a rate of 2.0% per annum above the amount that would apply to an alternative base rate loan.
The term loan entered into on January 27, 2023 (the “Term Loan Mortgage”) bears interest at a rate of 30-day SOFR plus the applicable margin of 1.40%, subject to a zero floor.
Interest on the Asset-Based Notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62% until November 30, 2027. Following November 30, 2027, if the Asset-Based Notes remain outstanding, the interest rate on the outstanding Asset-Based Notes will increase by a per annum rate equal to the greater of: (i) 5.0% and (ii) the amount, if any, by which the sum of the following exceeds the interest rate otherwise payable with respect to such Asset-Based Notes: (A) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on November 30, 2027 of the U.S. treasury security having a term closest to seven years plus (B) 5.0%, plus (C) with respect to class A notes, 3.53% and, with respect to class B notes, 4.28%.
The advances under the Beethoven Credit Agreement shall bear interest (a) in the case of a base rate advance, at a rate equal to the base rate, which means, for any day, the highest of (i) the prime rate in effect on such day; (ii) the federal funds rate in effect on such day plus 0.50%; and (iii) Term SOFR for a one-month tenor in effect on such day plus 1.00% per annum, plus the applicable margin of 1.00% and (b) in the case of a Term SOFR advance, the Term SOFR for the interest accrual period plus the applicable margin of 2.00%.
The Company has entered into, and in the future may enter into, interest rate swaps and caps to manage interest rate risk. Under the Beethoven Credit Agreement, the Company maintains an interest rate cap agreement to manage its interest rate risk, capping a portion of the exposure at 4.445% for a two-year period. As of June 30, 2026, there are no interest rate swaps outstanding.
Maturity of Tranche A Term Loans
The loans outstanding under the Tranche A Term Loans mature on March 11, 2031.
Maturity of Revolving Credit Facility
The maturity date of the Revolving Credit Facility is March 11, 2031.
Maturities of Senior Secured Notes
As of June 30, 2026, there are no scheduled maturities of notes until 2028, when $371 million is scheduled to mature. Thereafter, $2.694 billion is scheduled to mature.
Maturity of Term Loan Mortgage
The maturity date of the Term Loan Mortgage is January 27, 2033, subject to a call option exercisable by Truist Bank at any time after January 27, 2028 if certain criteria relating to the Company’s creditworthiness are met.
Maturity of Tempo Asset-Based Notes
The maturity date of the Asset-Based Notes is November 30, 2050.
Maturity of Beethoven Credit Agreement
The maturity date of the Beethoven Credit Facility is June 29, 2030.
Interest Expense, net
Total interest expense, net was $49 million and $43 million for the three months ended June 30, 2026 and 2025, respectively, and $135 million and $119 million for the nine months ended June 30, 2026 and 2025, respectively. Interest expense, net includes interest expense related to our outstanding indebtedness of $46 million and $45 million for the three months ended June 30, 2026 and 2025, respectively, and $136 million and $132 million for the nine months ended June 30, 2026 and 2025, respectively. The weighted-average interest rate of the Company’s total debt was 4.0% at June 30, 2026, 4.1% at September 30, 2025, and 4.1% at June 30, 2025.