Lionsgate Refinancing $450 Million In Debt

Lionsgate

Transactions will save over $20 million in annual costs

Lionsgate is refinancing $450 million of its existing high-yield debt in a move that will save over $20 million annually in interest expense.

The studio made the announcement Monday in an 8-K filing with the Securities and Exchange Commission.

Lionsgate, the studio behind Jennifer Lawrence’s “The Hunger Games,” made a similar move last year when it paid off the $500 million term loan it used to buy Summit Entertainment two years early — which generated $10 million in annual savings.

Lionsgate announced a pair of transactions in Monday’s filing — a private placement of $225 million of senior secured notes at 5.25% and due in 2018; and  another $225 million in term loans.

The company said it used the proceeds, along with cash on hand and borrowings under its revolving credit facility, to pay off its 10.25% senior senior notes due in 2016.

Lionsgate stock has tripled in value since it bought Summit in January, 2012.

SEE ALSO: Lionsgate pays off Summit term loan early

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  1. Great tips! Companies borrow for any number of reasons. For Lions Gate, debt helps to fund growth initiatives. That includes acquisitions, such as the 2012 buyout of Summit Entertainment that brought the studio rights to the Twilight franchise. A smart move, Corporate debt is for strategic moves such as the Summit deal.

  2. Keith Schoose says:

    That $20 million in saving will go straight to the bottom line. Lionsgate management continues to make good decisions.

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