New Orleans -- Cable and broadcast networks that are having
difficulty funding new programming projects will be able to tap into a new program started
by New York-based investment banker CAK Universal Credit Corp., aimed at tying loans to
syndication fees.
CAK said at the National Association of Television
Programming Executives convention here Jan. 25 that it will offer loans from $5 million to
$200 million to television and film companies.
According to CAK, the program will allow television
companies -- including cable -- the opportunity to access capital on more favorable terms,
as the loans will be tied to asset-backed securities.
That financing method has been used recently by major
motion-picture studios, musicians and music publishers.
"With the dramatic growth of cable and satellite
television, the appetite for programming is nearly insatiable," said Robert
D'Loren, president of CAK, in a prepared statement. "Many television-program and
film-library owners are sitting on gold mines," D'Loren added. "To date,
they have not been able to leverage the value of these assets for other purposes.
We'll be offering them a way to monetize future cash flows while retaining
ownership."
The typical loans will have 10-year terms at 250 to 450
basis points over U.S. Treasury Notes, and they will not require the owner's personal
guarantee. CAK will securitize the loans singly or in portfolios and sell them to
investors in private placements.
CAK was launched less than a year ago by D'Loren,
Charles Koppleman and Prudential Securities to provide the entertainment industry with
more economical and greater credit access. So far, the company has originated $250 million
in loans, with another $400 million in its pipeline.
