Hedge Fund-Backed Film Financing Gets Junk Rating

Oct 30 2008 | 11:59am ET

The latest Hollywood box-office bomb won’t be shown on the silver screen, but may appear as another red line in a hedge fund’s earnings statement.

Paramount Pictures’ Melrose I financing, back in large part by hedge funds, has been downgraded to junk by Moody’s Investor Service, according to Hollywood Reporter. The bonds have seen their ratings fall by six grades, from investment grade Baa2 to junk grade B3.

The ratings downgrade indicates that Moody’s think Melrose’s senior debt holders are in trouble, leaving hedge fund investors in serious danger of big losses.

Melrose I is backed by 26 Paramount films released between 2004 and 2005.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...