Miramax Said to Market ABS Deal Tied to Movie Catalog

Miramax plans to sell $250 million of securities linked to film rights and contracts tied to movies including “Pulp Fiction” and “Shakespeare in Love,” according to a person familiar with the offering.

The production company is issuing securities rated BBB+ by Standard and Poor’s and maturing in 3.4 years, said the person, who asked not to be identified because the deal isn’t public. The debt may be sold to yield as much 250 basis points, or 2.5 percentage points, more than the benchmark interest rate. That equates to a yield of about 3.6 percent.

Issuance of securities linked to offbeat collateral has been rising as central banks around the world suppress interest rates, pushing investors toward riskier deals with higher yields. Sales of esoteric asset-backed deals, which encompass transactions that aren’t tied to traditional consumer lending, reached a record $30 billion in 2013, according to Barclays Plc.

Miramax issued $500 million of asset-backed bonds tied to its film library in December 2011, according to data compiled by Bloomberg. The New York-based company paid 6.3 percent to sell 1.83-year debt rated BBB by S&P and Baa3 by Moody’s Investors Service.

The market for esoteric asset-backed debt first gained attention in 1997 when banks arranged $55 million of securities tied to royalties from rock icon David Bowie. Hooters of America LLC, the chain best known for the skimpy tank tops worn by its waitresses, last month sold $300 million in bonds tied to franchise agreements and other income linked to restaurants around the globe, Bloomberg data show.

Auto loans, credit-card payments and student debt make up the bulk of the asset-backed securities market. Companies have issued about $97 billion of such debt this year, including $63 billion in sales tied to car loans, Bloomberg data show.

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