In a sign of renewed confidence in MGM, a number of banks have signed on to the Lion’s plan to refinance the $500 million in debt it took on after emerging from bankruptcy in 2010.

JPMorgan is the lead bank in the transaction, for which several lenders have already committed some $500 million, according to multiple sources with knowledge of the deal. Transaction will convert the current debt — which consists of a $175 million revolving credit facility and a $325 million term loan — entirely into a revolving credit facility, sheltering the Lion from costs on money it’s not using.

Refinancing has been out to a small group of potential lenders for the past few weeks. Observers say that given the current market interest, more lenders are likely to subscribe to the final deal than originally intended. Some 10-15 banks will likely take part in the syndicate.

Final bank commitments are due at the end of this week. Deal should close by the beginning of next week at the latest.

More notable than the transaction itself is that lender interest in the Lion — and the likelihood of the deal getting oversubscribed — are signs that Wall Street likes what it’s seen from MGM during the past year. That includes distribution deals (such as the Lion’srenewed homevid pact with 20th Century Fox and a deal with Sony to distribute the next two “Bond” sequels), lowered overhead; franchise pics “The Hobbit: An Unexpected Journey” and “Skyfall” currently in the works; and a boosted international television operation under toppers Gary Barber and Roger Birnbaum.

MGM’s appeal is reaching a broader audience than during its restructuring of two years ago, when many lenders were uncomfortable banking on a company so soon after a bankruptcy.

Nevertheless financial observers say the current refinancing is not surprising given that many Hollywood companies are looking to take advantage of better rates in a loosening credit market.

On Friday, ratings agency Moody’s Investors Service upgraded MGM’s debt rating, likely boosting the Lion’s appeal to potential lenders. MGM completed its restructuring at the end of 2010, which helped the Lion wipe off nearly $5 billion in debt from its books.

News of MGM’s current refinancing effort comes a week after an executive at Kirk Kerkorian’s investment vehicle, Tracinda Corp., told the Wall Street Journal that the former MGM owner was seeking to acquire a movie studio, production company or other entertainment business.

MGM declined to comment. JPMorgan has a policy of not commenting on deals before their official announcement.