Eight months after acquiring "Twilight" studio Summit, Lionsgate closes one of the biggest credit facilities in recent Hollywood history
Lionsgate has closed $800 million in refinancing with the help of JPMorganChase, Bank of America and several other major financial institutions, the studio announced on Thursday.
The five-year credit facility replaces a $340 million facility, closed in 2008, and thus gives the studio a larger borrowing base and more money to play with over the next few years.
The studio is likely to use the credit to pay down some of its debt, as it holds $436 million in high yield notes — those bonds deemed below investment grade but that offer a higher yield (hence the name).
Though it gives the company more money to spend on new projects, it does not appear that is a key part of its plans for the funds.
In its release, the studio described the facility as one of the largest in recent Hollywood history, and others drew comparisons to similar refinancing by Viacom and DreamWorks.
"The size of the new facility is a testament to the Company's strong relationships with the financing community and the value of its franchises and filmed entertainment library, and it reflects the significant recent expansion of the Company's borrowing base," David Shaheen, Managing Director and head of JPMorgan's Entertainment Industries Group, said in a statement. "This new facility will be an important resource in helping Lionsgate to continue executing its long-term growth plan."
Lionsgate has been aggressive over the past year, paying $412.5 million for Summit Entertainment, the studio behind "Twilight," in January. Deals such as this refinancing are common after a transaction of that magnitude.
Armed with the final "Twilight" and its homegrown "The Hunger Games," one of the biggest new franchsies in the business, the deal turns those current and future successes into greater financial flexibility over the next few years.
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