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Published on 1/31/2012 in the Prospect News Bank Loan Daily.

Summit Entertainment sets Wednesday launch for $500 million term loan

By Sara Rosenberg

New York, Jan. 31 - Summit Entertainment LLC has scheduled a conference call for 11 a.m. ET on Wednesday to launch its proposed $500 million 41/2-year senior secured term loan (B1/B+), according to a market source.

J.P. Morgan Securities LLC, Barclays Capital Inc. and Jefferies & Co. are the bookrunners and lead arrangers on the loan that closed on Jan. 13 but has not yet been syndicated.

The source said that pricing is still to be determined.

However, according to recent filings with the Securities and Exchange Commission, the term loan is priced at Libor plus 600 basis points.

Amortization is quarterly installments equal to $13.75 million, with the balance due at maturity.

Covenants include a minimum liquidity ratio, a minimum fixed charge coverage ratio and limitations on overhead expenses.

Proceeds were used to refinance an existing term loan in connection with the company's acquisition by Lions Gate Entertainment Corp. for $412.5 million.

The majority of the purchase price was funded with Summit's cash on hand. Other funds came from $55 million of existing Lions Gate cash, $45 million of cash received from a newly issued series of Lions Gate convertible notes, $50 million of Lions Gate common stock and an additional $20 million of cash or stock to be issued at Lions Gate's option within 60 days.

Summit Entertainment is a Santa Monica, Calif.-based motion picture studio. Lions Gate is a Vancouver, B.C.-based filmed entertainment studio.


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