Lionsgate Refinances Debt, Lowers Costs

The moves are expected to save the mini-studio $20 million in annual interest expense.

TORONTO -- Lionsgate has refinanced high-yield debt to lower its annual interest charges.

The mini-studio in a 8-K filing to the SEC on Monday said it did two separate transactions on July 19 for $450 million in new debt to replace existing borrowings.

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The first was a private placement for $225 million in new notes at 5.25 percent due 2018.

The second transaction saw Lionsgate secure term loans for another $225 million.

The moves are the latest as Lionsgate looks to lower debt costs and deleverage in the wake of the Summit Entertainment takeover.

Lionsgate will use the $450 million from the new notes and term loans to discharge 10.25 percent of senior secured second-priority notes due 2016.

The debt refinancing aims to lock in lower long-term interest rates and save Lionsgate around $20 million in annual interest expense.