Co. takes advantage of improved banking market
Arnon Milchan’s New Regency Prods. soon will close on a $450 million credit refinancing, with proceeds tagged for film and TV production by the Fox-based independent.
JP Morgan Chase is leading the new financing, with 17 other lenders participating in the five-year revolving facility’s loan syndication. Facility replaces a previous $600 million pending set to expire next June.
JP Morgan’s Christa Thomas said the refinancing is being secured early to take advantage of an improved banking market and “strike while the iron is hot.” Borrowing capacity was downsized a bit from the previous facility because New Regency never came close to drawing on the full amount available, Thomas said.
Quick market success, once the new lending went to market for syndication, reflects well on New Regency and its execs, she added.
“Some banks have exited the market since the first deal (but) most of the banks have recommitted at the same level or a higher level than before, and that’s really gratifying,” Thomas said. “It’s a great reflection on the company — bankers consider their management to be first-rate.”
New Regency undertakes fewer than a half-dozen solo film projects annually, but its productions tend to be relatively pricey. The 11-year-old company also participates in several other co-productions each year with Fox, where New Regency has a long-term deal.
New Regency-Fox co-prod “Daredevil,” starring Ben Affleck as the well-known comic book hero, is skedded for Valentine’s Day release, and other 2003 titles include April 11-slotted “Down with Love,” a Renee Zellweger-Ewan McGregor romancer. New Regency TV productions include Fox comedy skeins “Malcolm in the Middle” and “The Bernie Mac” show.
“Malcolm” is currently selling syndication rights to the series for the first time, and the anticipated boost to company coffers from that effort helped shave New Regency’s borrowing needs.
“Based on what we already have (sold), the projections are that cash flow for 2004 forward is going to be very substantial,” New Regency CEO David Matalon said.
Exec veep-chief financial officer Louis Santor noted DVD cash flow from New Regency’s library titles have outpaced expectations, further bolstering cash flow.
JP Morgan closed on a $1.5 million credit facility and loan securitization for DreamWorks last month, and just before that led a $1.75 billion credit facility for MGM.
“The bank market has turned the corner and is coming back,” JP Morgan Securities managing director John Miller said.