MGM Closes on $300 Million Term Loan

The company confirmed it has borrowed $100 million more than originally anticipated and plans to use the money for corporate purposes.

Metro Goldwyn Mayer on Thursday confirmed it has borrowed $300 million under a second lien term loan agreement, which is $100 million more than was originally anticipated.

The six-year loan, at 5.125 percent, was arranged by J.P. Morgan Securities and Goldman Sachs.

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MGM said it planned to use the loan proceeds for general corporate purposes even though it is currently debt free and already has a bank line of credit for more than $600 million.

Analysts have speculated MGM may want the money to expand production or make an acquisition, or it could be part of preparation for a IPO, although the company has not given any indication it is planning one in the past year.

MGM Holdings' (the legal name of the company) thinly traded stock on private markets is currently $78.25 a share, up from $54.25 one year ago.

News of the loan was earlier reported by The Hollywood Reporter.