Metro-Goldwyn-Mayer announces successful syndication of $800 million bank financing

Business Wire, Sept 25, 1996

SANTA MONICA, Calif.--(BUSINESS WIRE)--Sept. 25, 1996-- Metro-Goldwyn-Mayer Inc. ("MGM") Wednesday announced the successful syndication of its $800 million secured bank financing, underwritten and arranged by J.P. Morgan & Co.

Proceeds will be used to finance the acquisition of MGM from the Consortium de Realisation ("CDR") and to provide for future working capital needs and other general corporate purposes.

The $800 million financing is comprised of a $450 million five-year revolving credit, a $250 million six-year amortizing term loan, and a $100 million seven and one half-year amortizing term loan. Upon closing in early October, MGM will draw both term loans and $100 million of the revolver to finance part of its $1.3 billion acquisition of the company from the CDR. The remaining $350 million will be used for working capital purposes.

"We are extremely pleased with the support that the syndicated loan market has provided to MGM," said Frank G. Mancuso, chairman and chief executive officer of MGM. "J.P. Morgan is to be commended for their efforts in leading this successful transaction. Bank of America as syndication agent and Societe Generale as documentation agent have demonstrated their support by each committing $100 million to this transaction."

"The 21 participants in this financing demonstrate the confidence that the market has in the management and investor buyout of MGM," said Mary E. Watkins, managing director and head of loan syndications at J.P. Morgan. "As the owner of one of the largest and most critically acclaimed film libraries, MGM is well positioned to benefit from the growth in demand for content currently occurring in the global entertainment industry."

MGM is one of only seven fully integrated film and television studios worldwide, possessing global production and distribution capabilities. In July 1996, Mancuso, chairman and chief executive officer of MGM, and an investor group comprised of Tracinda Corp. and Seven Network Limited entered into an agreement to purchase MGM for $1.3 billion.

Metro-Goldwyn-Mayer is actively engaged in the worldwide production and distribution of entertainment product, including motion pictures, television programming, home video, interactive software, music, licensed merchandise, a 1,500-title film library, a significant television library and a 4,500-title home video library. The company's operating units include MGM Pictures, United Artist Pictures, MGM Worldwide Television, MGM/UA Telecommunications Group, MGM/UA Distribution Co., MGM/UA Home Entertainment and MGM/UA Music, among others. For more information on MGM, visit the Lion's Den at http://www.mgmua.com.

CONTACT: Craig A. Parsons, 310/207-9300