$600M Snoopy bonds anything but Peanuts

The company that owns the "Peanuts" cartoon characters sold $600 million in bonds.

Story highlights

  • Iconix Brand Group sold $600m of bonds backed by the revenues from its portfolio of brands.
  • Company owns the rights to the Peanuts cartoon strip featuring Snoopy, Charlie Brown and their friends

Snoopy just got sliced, diced and served to bond investors.

Iconix Brand Group, which owns the rights to the Peanuts cartoon strip featuring Snoopy, Charlie Brown and their friends, sold $600m of bonds backed by the revenues from its portfolio of brands.

The unusual deal is the latest in a line of esoteric securitisations, in which investors have been offered bonds backed by everything from timeshare loans to racehorse semen. With interest rates at historic lows, investors have sought the higher yields available on these unusual securities.

Iconix had planned to raise $500m but said on Friday it had increased the size of the deal due to strong demand.

The company will use the proceeds to pay for its acquisition of Umbro. It agreed last month to buy the sports apparel and footwear brand from Nike for $225m in cash.

Umbro joins a portfolio of 28 Iconix brands, including Mossimo, London Fog, Candie's, Mudd, Sharper Image and partial rights to Madonna's Material Girl.

Iconix said this month that the brands together represent more than $13bn in annual retail sales. The $600m of securitised notes are backed by licensing income from 23 of the brands.

Neil Cole, chief executive, said at the company's latest quarterly results that the launch of a new Peanuts film and international expansion would boost growth. After paying for the Umbro deal, the remaining proceeds from the securitisation will be used to pay down existing debt and kept for future acquisitions. Barclays led the Iconix securitisation, with co-managers Goldman Sachs, Credit Suisse and Guggenheim.

The market for so-called esoteric asset-backed securities (ABS) has revived this year, along with the wider market for ABS, which are more traditionally backed by home equity, credit card and car loans, sometimes called "prime" ABS.

Daniel McGarvey, head of asset-backed finance at RBS, said some companies might find it easier or cheaper to raise debt through the securitisation of assets rather than issuing bonds in the high-yield bond market, and investor demand for esoteric ABS showed no sign of abating.

"The driver is investors are finding opportunities for yield in this market that the flow of prime ABS is not giving them. ABS backed by auto loans, credit cards and student loans have been well bid already."

Cory Wishengrad, co-head of the US ABS business at Barclays, echoed the sentiment. He said: "Given the overall yield environment and given how much spreads have tightened in more on-the-run securities, investors are increasingly looking for places where they're comfortable on credit but where they can also generate yield."

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