MGM sets up loan facility

Studio looks to cover cash needs as debt swells

NEW YORK — Metro-Goldwyn-Mayer has arranged a $250 million “bridge loan” facility from one of its main bank lenders, MGM said in an SEC filing Monday, to help cover its cash needs until it completes a $500 million stock offering.

Costs of buying the Polygram Filmed Entertainment library, terminating the Warner Home Video distrib deal and film production all combined to increase MGM’s debt from $715 million as of Dec. 31 to $1.105 billion by March 31, MGM said.

And since then, its debt has increased to $1.136 billion, leaving only $164 million available under the $1.3 billion facility. MGM noted that the credit line allows for an additional $200 million to be borrowed under certain conditions, however.

The bridge loan facility is in addition to the existing credit line and would be repaid from the stock offering, MGM said. Timing on the offering is unclear, but it is likely to get done in the next couple of months.