JP Morgan is working to up MGM's credit line from $500M to $650M in wake of success of "Skyfall" and "The Hobbit"
MGM is looking to adjust its debt and raise its current credit line from $500 million to $650 million, a source with knowledge of the deal told TheWrap on Wednesday.
The goal is provide more financial leeway and clout for the studio, which is on roll with the success of the blockbusters “Skyfall” and “The Hobbit: An Unexpected Journey.” Some of the money would go to pay back its co-production partners Sony, which advanced it the money to co-finance “Skyfall,” and New Line, with whom it financed “The Hobbit.”
The money could also be used to fund its own film projects without partners or for new media acquisitions.
JP Morgan is the lead bank on the deal, which would take advantage of improved interest rates since its last financing deal in 2008, along with Bank of America and the Royal Bank of Canada.
MGM came out of bankruptcy in 2010 with a $175 million credit facility and a $325 million term loan, which was converted into a $500 million credit facility via JP Morgan last year.
The company has righted itself under chief executive Gary Barber — he was co-CEO until Roger Birnbaum stepped down in October of last year — and is considering an initial public offering later this year.
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