The Export Import Bank of the United States, a government agency that supports the export of American goods, has taken its first step into the film business.
London-based J& M Entertainment became the first company ever to secure film financing from Exim, when the bank agreed last year to underwrite around 75% of J& M’s investment in “What’s Eating Gilbert Grape.”
The experience proved so positive for Exim – J& M repaid its loans within four months, more than a year ahead of schedule – that the bank is now enthusiastic about backing future American projects from J& M, and may even be willing to consider proposals from other companies involved in selling U.S. pix abroad.
Filmed entertainment is the second-largest export industry in the U.S., only exceeded by aerospace. Exim’s longtime involvement in the aerospace sector has earned it the nickname “Boeing’s bank,” but it has always been shy of the more flamboyant world of film.
Its caution was reinforced by a close shave a few years ago, when a film company with which it was considering getting involved went bankrupt just before the deal was signed.
But with film on course to overtake aerospace as America’s No. 1 export sector, Exim’s new interest in the industry seems long overdue.
Wore bank down
The key figure in breaking down Exim’s resistance to film is Thomas Dillon, senior VP of NatWest Markets in L.A., who has dealt with the government agency for 20 years. NatWest Markets is one of J& M’s bankers, along with Coutts and Berliner Bank.
Under the deal, Exim guaranteed about 75% of the loan that J& M received from its banking syndicate to cover its half of the $13.5 million budget for “Gilbert Grape.” J& M took foreign rights, with Paramount stumping up for domestic.
The Exim guarantee allowed the NatWest/Coutts/Berliner syndicate to exceed its normal lending limit for J& M. “It enabled us to extend our loan facility at no extra cost,” explained Dillon.
The banks would not reveal the precise size of J& M’s credit line, but indicated that the figure tends to hover around $30 million-$35 million. “J& M is very credit-worthy,” Dillon said.
Although J& M is a British company, “Gilbert Grape” was shot in Austin, Texas, which qualified it for Exim’s assistance. Under Exim’s rules, any product it supports must have at least 50% “American content.”
Mike Ryan, co-chairman of J& M, said that it was a conscious decision to offer Exim a film with a relatively modest budget first time out, in order to minimize its apparent risk. But he said J& M will likely take bigger films to the bank in the future.
“They are very open to entertaining new ideas now, especially from J& M,” Dillon added.
“Gilbert Grape” was directed by Lasse Hallstrom and starred Johnny Depp and Leonardo DiCaprio. It was a highly profitable project for J& M, performing particularly strong at the box office in Scandinavia, Benelux, Germany and Japan.