MGM studio seeks to refinance $3.7 billion debt: source

Thu May 14, 2009 2:25pm EDT
 
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LOS ANGELES (Reuters) - Hollywood studio Metro- Goldwyn-Mayer has hired investment bank Moelis & Co to refinance $3.7 billion debt held by about 140 creditors, a source familiar with the matter said on Thursday.

The source said the creditors have formed a steering committee led by JPMorgan Chase & Co.

The storied MGM, home to the James Bond movie franchise, is set to report results to lenders on Thursday that will show it operated in line with internal forecasts, finishing the fiscal year ended March 31 with over $500 million in cash flow from its film and television library operations, about a 5 percent drop from a year earlier, the source said.

Bankers estimate MGM is paying north of $250 million a year in interest on the debt, which comes due in 2012.

The source said the company is in compliance with all of its debt covenants, but is potentially seeking a way to make the loan due later, or reduce it in size.

The source said that company management has no intention of selling the privately held company.

(Reporting by Sue Zeidler, editing by Gerald E. McCormick)

 
<p>The headquarters of the MGM movie studio is pictured in Los Angeles November 12, 2007. REUTERS/Fred Prouser</p>