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Institutional Demand Roars On For MGM Credit

18 May 2002

Bank of America, J.P. Morgan and Fleet Bank's $600 million "B" loan for Metro Goldwyn-Mayer-Studios sold out on the day of launch in Los Angeles last Tuesday, as the institutional market continues to burn up available credits. The "B" was structured to tap the hungry institutional market as pro rata lending continues to contract, said a banker familiar with the deal. Pricing is unlikely to depart from the LIBOR plus 3% spread on the "B" loan though despite the rapid subscription, she noted.

The tranche is part of a $1.5 billion refinancing which also comprises a $600 million revolver and a $300 million "A" term loan. The "B" loan is six years and the spread on the five-year pro rata is LIBOR plus 23/ 4%. The pro rata is currently being shopped, the banker added. Joe Fitzgerald, a spokesman for MGM did not return calls.

18 May 2002