Marvel Launches Independently Financed Film Slate With Closing of $525 Million Non-Recourse Credit Facility
Transforming initiative provides Marvel greater profit potential Marvel will change its name to
New York, NY, September 6, 2005 -Marvel Enterprises, Inc. (NYSE: MVL) announced today the completion of a $525 million non-recourse debt facility which will finance Marvel's production of up to ten films based on characters from its famous stable of comic book characters, including Captain America, Nick Fury and The Avengers. Paramount, a unit of Viacom, Inc. (NYSE: VIA and VIAB), will distribute the film slate, with the first theatrical release expected for summer 2008. This transforming arrangement gives Marvel complete creative control, the ability to build a film library and greater profit potential than it has received from films licensed to other studios. To reflect this major expansion of its Hollywood presence, Marvel will change its name to "Marvel Entertainment, Inc."
These film production activities, to be carried out by subsidiaries of Marvel Studios, Inc., will complement existing and future film projects licensed to other studios. Marvel has a strong track record of working closely on Marvel character-based films it has licensed to other studios, such as Sony Pictures, 20th Century Fox, New Line Cinema, Universal Studios, and Lions Gate Entertainment. In 2006, Marvel anticipates the release of Ghost Rider, X-Men III and Punisher II through Sony, Fox and Lions Gate, respectively.
The seven-year, $525 million facility was arranged by Merrill Lynch, Pierce, Fenner & Smith Inc. and consists of $465 million in revolving senior bank debt and $60 million in mezzanine debt. Both S&P and Moody's have given the senior bank debt an investment grade rating. In addition, Ambac Assurance Corporation has insured the senior debt, raising its rating to AAA. MVL Film Finance LLC, a special purpose, bankruptcy-remote subsidiary of Marvel, will be the borrower under the facility. That subsidiary has pledged the theatrical film rights to the ten characters included in the film slate as collateral for the borrowings. The borrowings are non-recourse to Marvel Enterprises, Inc. and its other affiliates.
Avi Arad, Chairman and CEO of Marvel Studios, commented: "The film slate financing enables us to evolve our entertainment operations into film production, an area where we have experienced past success with our partners and which offers significant profit potential for our company. The characters involved are some of the most valuable in the Marvel Universe, and we are excited to launch them as consumer brands via feature film releases under our direction. We look forward to working with Brad Grey and the exceptional team he has put together at Paramount and are confident that this will be a successful venture for us both."
