DBRS Rates Village Roadshow Films (BVI) Limited

DBRS, Inc. (DBRS) has today confirmed the following ratings to the following facilities issued by Village Roadshow Films (BVI) Limited. Upon the close of the transaction there were three separate facilities totaling $1.025 billion in the aggregate. VRF has the ability to increase the total debt issued in the future (maximum facility amount for the new films facility and the ultimates film facility is $1.125 billion).

DBRS has assigned ratings to Village Roadshow Films (BVI) Limited transaction (referred to as VRF). The VRF Facility is secured by international film rights and net cash flows from 72 qualifying films. The portfolio is expected to grow over time as future films are added to the New Films Facility within VRF.

The two facilities: New Film Facility (NFF) and Ultimates Film Facility (UFF) are referred to as the VRF Facility. When films are initially completed and their interests sold to VRF, they are funded in the New Films Facility. Cash flows are allocated to each facility depending on where the film is funded. When the film is twelve months old it may be transferred into the Ultimates Film Facility and funded through the Tranche A-1 Revolving Credit Facility.

The portfolio includes 72 films but they have all been released in the theatre at different times (four films have already been released in the past 12 months and are currently funded in the new films facility).

The NFF and UFF pay current interest on a floating basis depending on the respective facility and how it is being funded. The facility has a Legal Final Maturity Date of fifteen years past the Renewal Closing Date, November 21, 2012.

Rabobank acts as Administrative Agent and Collateral Agent on the VRF Facility. This facility is primarily used to fund direct negative costs of a slate of motion pictures to be co-produced and co-financed with major motion picture studios, principally Warner Bros. (WB).

Village Roadshow Pictures Group (VRPG) is an independent, international production group that was founded in 1997 to create, develop, co-produce, co-finance and distribute major motion pictures through a unique strategic partnership with major motion picture studios, principally WB. VRPG’s library is a portfolio of commercial films which has become a library with substantial value.

Through its partnership with WB, VRPG has direct access to and benefits from the scale of WB’s breadth of product and professional talent, studio and marketing infrastructure, and global distribution network, while maintaining the creativity, flexibility and low cost model associated with an independent production company. VRPG was founded and is currently 47.6% owned by Village Roadshow Limited (VRL). VRL is a diversified entertainment and media company headquartered in Melbourne, Australia and listed on the Australian stock exchange (ASX: VRL).

The methodology used to assess this transaction, as well as background information on the film industry, is contained in the “Rating Global Film Rights Securitizations”.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Global Film Rights Securitizations, which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.