Metro Goldwyn Mayer said it enhanced its debt capital structure to $2.5 billion, giving it greater flexibility to pursue its growth strategy.

The new facility includes a $1.7 billion five-year revolving credit facility, a new $400 million seven-year Term Loan B and a new eight-year second lien Term Loan. The company simultaneously repaid the outstanding balance on
its prior $850 million loan.

Arranged by J.P. Morgan with a syndicate of lenders, the credit facility lowers MGMs borrowing rate on the revolving credit facility and, in some cases, provides better terms than under its earlier agreement.

“This transaction is an important milestone for the company and will support the continued growth trajectory of MGM into the future,” said MGMs Chief Financial Officer Kenneth Kay in a statement.

Last month, Moodys Investor Service downgraded MGM on two key ratings due to the companys increased spending on film and TV projects. It cited concerns about MGMs expanded debt load after increasing its revolving credit facility to $1.6 billion, up from $1 billion (that comes due in 2023), plus it has term loans of $400M and $500M due in 2025 and 2026.

“The higher leverage and change in financial policy is a departure from the companys very conservative financial policies espoused by its departing CEO Gary Barber, who had led the company since it emerged from bankruptcy in 2010,” Moodys wrote in a report.

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