Deal: Lend $10M for low-risk high-return film bridge and mezzanine loans earning 60% interest
DescriptionThis leading California attorney/producer who has successfully advised the finance of more than $1 billion for 200+ studio and independent films seeks to spin off a successful feature film bridge and mezzanine loan business as a fund. The company is seeking $50 million in a line of credit to finance qualified later-stage low-risk major independent film and television productions from top tier independent producers. On an annual turnover of $50 million, the company expects to generate $12 million or more gross annual return; at any one time, well less than $50 million will be required by the venture. There is little competition in this space because of the specialized nature of film financing, and entry is difficult for others because of the complexity of the financing structures. After rigorous due diligence and proof of collateral, the bridge funds will be loaned to financially qualified independent productions for 90 day intervals at a 15% quarterly rate (annualized IRR 60%). The mezzanine loans will be loaned at 20% annual rates. Loans will be fully secured by tax credits, rebates, and qualified presales. Key guarantor has $500 million in revenue over last 10 years and pipeline of world class action and Transformer class family films with major stars and directors attached. The historic default rate on this producer's lending projects is less than 2%, and in the case of default, he and the investor can take ownership of the production and distribute it through the producer's worldwide network. Aside from the high annual return, investors could also benefit from film production tax rebates given by certain state and national governments. Investors will recoup their funds plus profits in no more than 18 months. This venture is ideal for hedge funds, HNW investors and family offices seeking a high steady return with low risk.
CountriesUnited Arab Emirates, Australia, Canada, United Kingdom, Hong Kong, United States