Metro-Goldwyn-Mayer ups credit facility to $1.75 billion from $1.5 billion

By Sara Rosenberg

New York, June 12 - Metro-Goldwyn-Mayer Inc. increased the size of its senior secured credit facility to $1.75 billion from the originally planned size of $1.5 billion. The extra $250 million was added on to the total size due to strong market demand resulting in oversubscription, the company said.

Banc of America Securities LLC and J.P. Morgan Securities Inc. acted as co-lead arrangers and joint book managers. Fleet Securities, Inc. acted as arranger.

The new loan consists of a $600 million five-year revolver with an interest rate of Libor plus 275 basis points, a $300 million term A with an interest rate of Libor plus 275 basis points and an $850 million term B with an interest rate of Libor plus 300 basis points, according to a syndicate source. Initially, the company planned on offering a $600 million term B. Besides the upsized institutional tranche, all other details of the credit facility remain the same.

The deal has been allocated, the syndicate source added.

"MGM is in the strongest financial position it has ever been in its 78-year history," said Alex Yemenidjian, chairman and chief executive officer, in a news release. "Even though we have no immediate need for cash, this increased access to low-cost capital gives us more flexibility and approximately $1 billion of available capacity to pursue acquisition opportunities."

"The increase in our credit facility in a difficult financing market underscores the inherent value and strength of our assets, and the confidence that our lenders have in our company and in our senior management," added Daniel J. Taylor, senior executive vice president and chief financial officer.

Metro-Goldwyn-Mayer is a Santa Monica, Calif. developer, producer and distributor of films and television shows

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