Chase Manhattan Bank is readying a $500 million bank line for Arnon Milchan’s New Regency, which will significantly expand the amount of capital New Regency has for film production, bankers said Tuesday.
The bank credit, which replaces a $350 million borrowing facility New Regency has had with an offshore bank, will be supplemented by the $200 million in equity invested by 20th Century Fox as part of a deal to get New Regency to move to Fox from Warner Bros. (Daily Variety, Sept. 9).
Chase plans to take the New Regency deal to the bank syndication market in early April, the first time Milchan’s company has tapped that market. More significantly however, the New Regency deal is the first in what is likely to be a spate of $500 million-plus bank lines for film companies offered by Chase to the bank market in coming months, said John Miller, a managing director with Chase in Los Angeles.
Miller said the rising cost of film production is pushing up the size of many of the credit lines Chase is arranging for indies such as New Regency. In the past the biggest deal would be about $300 million.
As a result of the bigger facilities, Chase wants to “broaden the bank universe and get more people interested” in participating in the syndication of a film loan, Miller said.
With that in mind, Chase held a seminar Tuesday in New York attended by about 150 representatives of about 85 banks, concerning details of the film industry. Among the speakers was New Line president Michael Lynne.
Miller said most of the bankers attending had “no prior knowledge of the film business.” He said reaction to the seminar from the bankers was positive.