The Weeknd is in advanced discussions to raise about $1bn in financing backed by his music rights, in a potential landmark deal for the fast-growing music royalties market, according to Bloomberg.

New York-based private equity firm Lyric Capital Group is leading talks with the Canadian-born artist, whose real name is Abel Tesfaye, and has reached out to other investors to line up the financing. The proposed structure includes $500m of senior debt, $250m of junior debt, and $250m of equity, according to people familiar with the matter.

If completed, the transaction would rank among the largest ever in the music rights sector, which has drawn heavy investment from firms such as Apollo Global Management and Carlyle Group in recent years.

The Weeknd is considering using his stake in music publishing rights and his share of master recordings as collateral. Half of his publishing rights are already owned by Chord Music Partners, backed by Universal Music Group and Dundee Partners.

Lyric Capital invests in royalties and owns Spirit Music Group, which controls catalogs from Tim McGraw, Jason Aldean, and Ingrid Michaelson. The firm closed its second royalties fund on $800m in 2023.

The financing push follows a wave of high-profile catalog monetization, including Sony’s $600m acquisition of half of Michael Jackson’s catalog and Justin Bieber’s deal with Hipgnosis, which packaged royalties into $1.47bn of bonds backed by Blackstone.

With more than 110m monthly listeners on Spotify, The Weeknd remains one of the world’s most streamed artists. While older acts have dominated catalog sales, younger performers like Bieber, John Legend, and now The Weeknd are increasingly tapping private equity-backed financing to monetize rights and fuel growth initiatives. S: Private Equity Insights