Bloomberg News

MGM Studio Secures $650 Million for Films, Web Projects

January 31, 2013

Metro-Goldwyn-Mayer Inc. (MGMB:US), maker of the “James Bond” pictures, is close to securing $650 million in loans to fund movie production and digital ventures, three people with knowledge of the arrangements said.

The refinancing, led by JPMorgan Chase & Co. (JPM:US), may close by tomorrow and replaces a $500 million facility lined up in February 2012, according to the people, who requested anonymity because details haven’t been made public.

Metro-Goldwyn-Mayer, which emerged from bankruptcy in late 2010, is moving ahead with productions, including sequels to the “The Hobbit” with Time Warner Inc. (TWX:US)’s New Line Cinema, and new Bond films. The new financing lowers the studio’s interest cost and increases the cash available for new projects.

“The fact that they’ve increased their funding is a solid vote of confidence in MGM’s management and their business plan and execution,” said Lindsay Conner, a media attorney at Manatt, Phelps & Phillips, who had no role in the MGM deal. “They’ve come a long way from a couple of years ago.”

The revolving credit facility includes $600 million syndicated to eight to 10 banks and $50 million from about a half-dozen institutions that invested smaller sums, the people said. The publication Variety reported on the loan arrangements earlier today.

IPO Filing

MGM said in July that it filed a confidential registration for an initial public offering. The company, led by Chief Executive Officer Gary Barber, is owned by private-equity investors including Anchorage Capital Group LLC, the largest holder, Highland Capital Management LP and Solus Alternative Asset Management LP.

MGM found box-office success last year with the new Bond adventure “Skyfall,” which has generated $1.08 billion in global box-office sales, according to Box Office Mojo, an industry researcher.

“The Hobbit: An Unexpected Journey,” based on the novel by J.R.R. Tolkien, has taken in $940 million, according to Box Office Mojo. The studio also had the surprise hit “21 Jump Street,” a comedy made for $42 million that took in $201.6 million worldwide, according to the film researcher.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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