Studio refinances debut, closes $500 million loan
Summit Entertainment has refinanced its debt, closing a new $550 million term loan as well as a $200 million revolving line of credit for a total of $750 million.The minimajor announced Tuesday that it had closed of the deal, led by JP Morgan and UBS AG. Size of the loan was cut by $50 million from what Summit proposed in January It plans to use the funds to pay down existing debt from the $1 billion in debt and equity raised four years ago when Summit launched its effort to become a full-fledged production and distribution company. Summit said Tuesday that the funds would also be used for development, production and distribution of feature films, working capital and corporate purposes, and a distribution to members. Summit received its first debt ratings from Moody’s Investors Service and Standard & Poors in January when the refinancing was unveiled with both agencies expressing a mix of optimism and caution. Both agencies gave B ratings to Summit’s debt and cited concerns over the end of the “Twilight” franchise next year and the volatile nature of the feature film business. Summit will open the fifth and final “Twilight” film Nov. 16, 2012 — nearly a full year after the fourth film — with the official title “The Twilight Saga: Breaking Dawn — Part 2.” Summit saw success in the fall with “Red,” which grossed $90 million, and is exploring a sequel. It’s attemptiing to reboot the “Highlander” franchise. Summit’s 2011 releases include “Drive Angry,” which has performed poorly, “Source Code,” “The Beaver” and “Three Musketeers.” It’s wrapped the Sam Worthington thriller “Man on a Ledge” and it announced a deal Tuesday with Participant Media and Imagenation Abu Dhabi to develop a feature based on the Deepwater Horizon oil rig explosion. As a result of the refinancing, Summit’s largest investors will receive a cash distribution of an undisclosed size. Those investors include Participant Media and private equity fund Rizvi Traverse Management.
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