09 Nov 2015 Getty Rumoured to have Raised $100M From Bondholders In Debt Swap

Just when you thought Getty Images was close to folding under the weight of its massive debt, rumours sourced by Bloomberg say the company has found a way to raise more cash to revive their “midstock” business.

If the rumours are accurate, the investors will be getting better-ranked bonds with higher interest rates in exchange for the $100M in cash.

Debt and Interest

Getty has been struggling since the previous owners, Hellman & Friedman, saddled the company with massive debt before selling it to the current owners, the Carlyle Group.  The ensuing decline in revenue and profitability was not anticipated, and has made it difficult for Getty to keep up with interest payments and still have cash to fuel growth.

This new capital raise is done under a debt swap deal. Owners of 65% of Getty’s unsecured bonds –worth $550M– are trading 43% of these $0.30 rated bonds for a total of $235M paying 7% interest, for new obligations worth as high as $0.68 each, totalising $252.5M that will pay 10% interest.

This deal will produce roughly $90M in extra cash for Getty after the investors’ demand for 5% discount, $2.5M in structuring fees, and other operational costs.

The article also says Getty reported a 1% increase in revenues for the third quarter of 2015, and has doubled it’s cash flow from June, finishing the quarter with around $39M cash.


The finance world frequently refers to Getty’s “midstock business” as having declined significantly and as being important to the company’s competitive situation.

This is almost surely reference to iStock, especially as it’s said to compete with Shutterstock and Adobe.

iStock is still definitely more microstock than midstock by generally accepted industry definition, but Getty likely prefers their bond traders hearing the term ‘mid’ than ‘micro’.

iStock Decline Slowing

Since going private we no longer see public information about iStock’s progress as party of Getty Images. During the period it was public, Getty revealed that iStock was growing at a massive rate and on target to be a substantial portion of Getty’s overall revenue.

The Bloomberg article now says that iStock – assuming that’s what they mean by “midstock” – has declined for the past three quarters, but that the latest quarter had declined only 8%, less than the previous two quarters when it declined by 10% and 15%.

This is consistent with what’s been seen from inside the industry as iStock’s exclusive contributors continue to leave and top non-exclusive contributors continue reporting iStock as being of diminishing importance in their distribution strategy.

The new cash is said to be intended to revive iStock via spending on marketing and improvements to search and discovery.

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