> ## Content Index
> Fetch the complete content index at: https://www.hypebot.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# WMG To Pay 9.5% On $1.1 Billion In New Notes
- URL: https://www.hypebot.com/wmg-to-pay-95-on-11-billion-in-new-notes/
- Published: 2009-05-29T11:40:39.000Z
- Updated: 2009-05-29T11:40:39.000Z
- Description: PLUS HOW EDGAR & LYOR CAN HELP SAVE WMG $230 MILLION AND STILL KEEP THEIR JOBS Last week the Warner Music Group surprised analysts by selling twice the number of. Continue reading [https://www.hypebot.com/hypebot/2009/05/wmg-to-pay-95-on-11-billion-in-new-notes.html]
- Author: Bruce Houghton
- Tags: Major Labels, #wp, #wp-post, #Import 2026-01-21 11:03

**[![Edgar Bronfman right](http://hypebot.typepad.com/.a/6a00d83451b36c69e2011570afb14a970b-100wi "Edgar Bronfman right")](http://hypebot.typepad.com/.a/6a00d83451b36c69e2011570afb14a970b-pi?ref=hypebot.com) [![LYOR COHEN CIGAR](http://hypebot.typepad.com/.a/6a00d83451b36c69e201156fba6f37970c-75wi "LYOR COHEN CIGAR")](http://hypebot.typepad.com/.a/6a00d83451b36c69e201156fba6f37970c-popup?ref=hypebot.com)** 
**PLUS HOW EDGAR & LYOR CAN HELP SAVE WMG $230 MILLION AND STILL KEEP THEIR JOBS**

Last week the Warner Music Group surprised analysts by selling twice the number of secured notes than it had previously announced. The $1,100,000,000 raised showed increasing confidence on Wall Street for the major label group and publishing company.

The funds raised plus $335 million in existing cash will be used to pay off previous notes according to documents [filed with the SEC](http://investors.wmg.com/phoenix.zhtml?c=182480&p=IROL-secToc&TOC=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvY29udGVudHMueG1sP2lwYWdlPTYzNTM4ODUmcmVwbz10ZW5r&ListAll=1&ref=hypebot.com) this morning. The $1.1 billion in new notes carry a 9.5% interest rate and come due in 7 years. At that hefty rate, the company will pay just over $410 million in interest to investors over the short life of the notes. 

**HOW TO SAVE $230M WITHOUT CUTTING A SINGLE JOB** 

Despite WMG loosing $1.1 billion (a number which coincidentally matches the amount of the notes) in the fiscal year that ended October of 2008, the two top executive [Edgar Bronfman Jr.](http://www.huffingtonpost.com/2009/03/18/ceo-bonus-pay-rises-despi%5Fn%5F176232.html?ref=hypebot.com) and [Lyor Cohen](http://people.forbes.com/profile/lyor-cohen/85377?ref=hypebot.com) received bonuses of $3 million and $3.25 million repsectively. Aknowledging that these bonds may not allow an early payoff, if the two execs kept their salaries ($1 million at Bronfman and $3 million for Cohen), but the board applied their bonuses to the bond debt each year, it would save WMG more than $230 million and pay the debt off a year early. (*Details of the calculation after the jump.)*

**THE CALCULATIONS:**

By applying the combined bonuses of $6.25 million as a once a year payment, a debt of $1.1 billion loaned at 9.5%, would be paid off a year earlier and save WMG $15 million in interest. $15 million plus 12 fewer monthly payments of just under $18 million per month ($17,978,000 per month X 12 months = $215,736,000) add up to a total saving of more than $230 million.