Spain unveils financing, bond outfit

Markab inks an exclusive deal with Marsh

MADRID — Jovial Spanish director Vicente Mora once organized Spanish film festivals’ opening galas. Now prexy of Markab Creativos, on Feb. 8 he offered his most adventurous curtain-raiser to date, unveiling a c30 million ($38.5 million) financing facility, allowing film producers to discount TV contracts, public subsidies and distribution advances against bank loans.

Markab also has inked an exclusive deal with risk management company Marsh Inc., a unit of Marsh & McLennan, the world’s biggest insurance broker, to facilitate completion bonds in Spain.

GBS Finanzas, a middle-market Spanish independent investment bank, is advising on the facility.

Tapping a clutch of foreign-based film funds, the financing line is being guaranteed by back-to-back agreements between international and Spanish banks leveraged against the funds’ assets, GBS VP Javier Herrero says. GBS is working to finish paperwork implementing investors’ framework agreements, he adds.

GBS’ involvement is a breakthrough: Spain’s often fusty financial establishment generally avoids film investment.

Markab promises other small revolutions. For example,many indie Spanish producers cannot discount TV or state aid commitments at banks, forcing them to put up personal assets as guarantees or co-produce with larger production companies.

“A producer I know, who pre-sold his project to TV, went to a bank to get a loan. A potential co-producer asked for 40% of the film’s rights merely to provide a guarantee to the bank. If he’d come to us, we’d have offered 5% to 7%,” Mora says.

“Right now Spanish films have multirisk insurance. Markab Completion will offer true completion bonds,” says Marsh Spain senior account exec Maria Martin.

Bondable films’ budgetary floor will decrease from $3.8 million to $1.9 million. The near-absence of completion bonds is a peculiarly Spanish phenomenon.

But Markab doesn’t set out to be a totally Spanish affair. Its advisory board includes Elba Luis Lugo, prexy of several capital risk funds; Ralph Zimmerman, founder and president of Canada’s Great North Artists Management; Michel Ruben, former head of international relations at the Almodovar brothers’ El Deseo; and Media Desk Ireland director Siohban O’Donoghue.

Mora says Markab aims to announce a clutch of international co-production agreements and to move into Italy. Per Herrero, Markab will be on the lookout for projects with international appeal.

When any of the financing facility reaches the Spanish industry, it will help films address their chronic funding shortage and abandon the current rush into low-budget, local filmmaking.