More than $100 million of Metro-Goldwyn-Mayer's bank debt traded last Thursday, a day after the company held a conference call to discuss an amendment to its credit facility. Its $2.7 billion term loan "B" dipped to the 99 1/4-99 5/8 context from the 99 7/8-100 1/4 range where it was trading before the call.
MGM is seeking an amendment to its entire credit facility, said sources familiar with the deal. JPMorgan leads the credit, which also consists of a $1.05 billion term loan "A." MGM's "A" loan fell to the 99.788-100.275 range, down from 99.925-100.363 context where it was trading before the call, according to Markit.
A trading desk analyst said MGM is seeking to reset covenants related to its leverage ratio. The current ratio is seven times and he said the company is in talks to increase it, but no final decision has been made. The company is also expected to increase the interest rates on the loans. The analyst said initial talk was of a 25 basis points increase, but it is now likely to be increased by 50-75 basis points. Both MGM's term loan "B" and term loan "A" are priced at LIBOR plus 2 1/4%.
MGM is a privately-held motion picture, television, home video, and theatrical production and distribution company. It is owned by an investor group comprised of Sony Corporation of America, Providence Equity Partners, Texas Pacific Group, Comcast Corporation and DLJ Merchant Banking Partners. An MGM spokesman did not return a call seeking comment. A JPMorgan spokeswoman declined comment.