When David Bowie raised $55 million by securitizing royalties from his back catalog in 1997, the concept was treated as a curiosity.
Nearly three decades on, credit rating agency KBRA says in a new report that it has rated more than $12.9 billion in music royalty bonds since 2020 alone – a figure that has more than tripled from just over $4 billion as recently as 2023.
But KBRA says issuance is about to contract.
KBRA expects music ABS issuance to fall by approximately 25% in 2026, dropping from over $3.3 billion in each of the past two years to slightly more than $2.5 billion – “primarily because of continued issuer consolidation.”
The agency has now assigned 81 ratings on music royalty ABS across 18 issuers since 2020, it said in the report, titled Playback: Issuance, Industry and Performance Trends in Music ABS, published on Thursday (May 14).
KBRA noted that consolidation “may have mixed implications for music ABS, potentially improving collateral diversification and servicing scale while reducing issuance activity if acquired catalogs migrate to investment-grade platforms.”
The forecast comes amid a wave of industry consolidation involving companies who’ve been active in the music ABS space:
According to the KBRA report, four of its rated music royalty ABS transactions have involved “issuer acquisitions, manager transitions, or publicly reported potential acquisitions” since the beginning of 2025 – “representing the highest level of such activity since the asset class reemerged in 2020.”
Despite the expected dip in issuance volumes, the KBRA report noted that the sector’s issuer base has expanded.
The number of unique issuers in the sector has doubled from nine in 2023 to 18 as of 2026, the agency noted – “providing a stronger foundation for long-term sector stability.”
“Although annual issuance volumes have remained somewhat volatile, the sector has demonstrated increasing consistency as a broader issuer base has reduced reliance on a small number of repeat issuers and supported a steadier transaction pipeline,” KBRA said.
Debt service coverage ratios (DSCRs) across the sector “have remained relatively stable, although pockets of underperformance highlight certain transaction- and catalog-specific risks,” the agency added.
On average, DSCRs have “trended lower, primarily because of refinancing terms and lower DSCRs at issuance,” according to the report.
Across the 81 ratings KBRA has assigned in the music ABS asset class, ratings “have generally remained stable,” the agency said, adding that it “expects continued rating stability across the sector.”
The Playback report is KBRA‘s fourth dedicated publication on the music ABS sector, following The Beat Goes On (2023), Sound Check (2025), and Track Split (2025).
Those reports have charted the sector’s growth in real time: KBRA reported 38 ratings across nine issuers totaling over $4 billion in 2023; 64 ratings across 15 issuers totaling approximately $8 billion by May 2025; and 76 ratings across 15 issuers totaling approximately $11.5 billion by October 2025.
The music ABS market has attracted a wave of new entrants in recent years, with deals from Chord Music Partners, Seeker Music Group, Influence Media Partners, Duetti, and HarbourView joining established issuers such as Concord and Sony-bound Recognition Music Group (formerly Hipgnosis).
In April, a new issuing vehicle linked to UMG-backed Chord Music Partners priced $500 million in debt through an ABS transaction backed by an $830 million catalog.
In March, Seeker Music Group closed a $267 million ABS – its first – backed by a portfolio of more than 19,000 copyrights and master recordings.Music Business Worldwide
