A short story in the NY Times says that Warner has refinanced itself with more than $1 billion in new bonds that won’t have to be paid back until 2016.

Here’s the interesting part:

Since the start of the year, shares of the Warner Music Group, the only publicly traded pure play on the recorded music business, have doubled, including a 23 percent gain just last week. Investors may be right in betting that the industry’s worst days are behind it, and that Warner is best positioned to capitalize, potentially by acquiring EMI.

Now, a 23 percent gain doesn’t mean much when the stock is trading at a fifth of what it was three years ago, and the “worst days” of the music business will remain a relative term. But it is interesting that the long-awaited EMI-Warner merger is back in the news:

The rejigged debt arrangements give Warner flexibility to do deals. And the timing of its coffer-filling exercise couldn’t be better. Its rival EMI is struggling under the $5 billion of debt borrowed by Terra Firma, the British private equity outfit run by Guy Hands, to take the company private.

In the past, EMI tried to buy Warner. But now the boot could be on the other foot. EMI, home of the Beatles and Beastie Boys oeuvre, is in no state to pounce. Moreover, its chief lender, Citigroup, would love to exit its position. When the two last talked, the potential synergies from a combination looked to be in the order of $250 million — which would carry a net present value of some $1.6 billion.

That’s reason enough for investors to begin their countdown to a Warner-EMI merger.