Lionsgate Shares Rise As Company Pays Off $500 Million Summit Loan
Lionsgate has paid off a $500 million loan related to its acquisition of Summit Entertainment four years before its final payment was due, and Wall Street reacted by bidding shares of the company past its all-time high, though the stock retreated a bit before Thursday’s closing bell.
According to a regulatory filing, the credit facility was repayable in quarterly installments equal to $13.75 million with the balance payable on Sep. 7, 2016, its final maturity date.
News of Lionsgate paying off the loan comes three weeks after it acquired an $800 million credit facility to replace an existing $340 million credit facility.
Lionsgate purchased Summit in January for $412 million in cash and stock plus the assumption of Summit’s $500 million debt.
Lionsgate had been expected to pay off the $500 million debt well before its maturity date because of a large cash flow created in part by the success of hit film franchises The Hunger Games and Twilight, the latter of which was acquired via Lionsgate’s purchase of Summit.
Lionsgate, in fact, had already paid off more than $200 million before announcing in its SEC filing on Thursday that “the amount outstanding in principal balance of approximately $299.2 million, as well as all accrued but unpaid interest, legal fees and other charges were paid in full.”
Lionsgate stock rose 53 cents to $16.17 on Thursday after touching $16.45 shortly after news broke that it had paid of its $500 million loan early.