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Bonds, completion bonds, goose pix

Banks eager to extend credit to filmmakers

HONG KONG — The easy money has dried up.

In simpler times, all a Hong Kong filmmaker needed for a greenlight was to attach an actor or two to a project. Asian distributors, flush with cash from booming B.O. in Southeast Asia’s tiger economies, would pony up funds without even asking to see a script.

Now, filmmakers are not only applying their creative skills to dreaming up film hits, but also to ways of financing them.

Enter Fred Milstein, president and CEO of U.S.-based CineFinance. Milstein, a former motion picture agent with William Morris, has spent his whole career in Hollywood. His firm specializes in issuing completion bonds — a common film financing method in Hollywood, but an alien concept in Hong Kong until CineFinance set up an office in the city a few months ago.

Completion bonds make it easier for filmmakers to find funding, because they guarantee a pic will be handed to a distrib on time, on budget and according to a pre-approved script.

Fulfilling those demands is a matter of course in most film markets. But in organizationally challenged Hong Kong, the birth of the completion bond business here could signal a radical change to the way films get made.

“Completion bonds require discipline, and that’s what has scared away many Hong Kong producers and directors before,” says Thomas Chung, who used Milstein’s services while executive producing the $20 million Michelle Yeoh starrer “The Touch.”

The city’s loose-limbed filmmakers have always been leery of anything that might quash their legendary spontaneity. But tough times leave little room for indulgence.

On time, on budget

Chung praises the discipline the completion bond process imposed on “The Touch” — which was completed on time and on budget — as well as the support Milstein provided during the shoot.

But bonds are not just for big budgets. Milstein is adamant that he also wants to work with the little guy. To that end, he’s working with producer Tsui Hark on his latest project, the $2 million “Era of Vampires.”

“We wanted to show you could do it smaller,” Milstein says. “The $20 million film is the exception rather than the rule.”

And if low-budget filmmakers go for completion bonds in a big way, the professional ethics that come with them could spread quickly.

Eyeing banks

That’s got financiers like Grande’s Shing hoping local banks will more readily extend credit to local filmmakers. “Banks in Hong Kong are traditionally not interested in film productions, because they’re too risky,” he says.

Milstein and others in the completion bond biz hope Hong Kong will become a regional hub from which they can tout their services.

Says Gilbert Shing, director of Hong Kong-based completion bond specialists the Grande Insurance Brokers: “I think completion bonds are a new trend here. The methods of producing films are becoming more professional and sophisticated. People are planning more, and they want bigger budgets.”