One of the world's most prominent character-based entertainment companies, Marvel Entertainment, Inc.'s recently completed a $525 million debt facility, which it will use to finance the production of up to ten films based on its famous comic book characters. The seven-year credit facility, which consists of $465 million in revolving senior bank debt and $60 million in mezzanine debt, was arranged by Merrill Lynch Commercial Finance Corp.  Shearman & Sterling client Ambac Assurance Corporation insured the credit risk on the transaction.  The Firm performed extensive intellectual property due diligence stretching back 70 years and negotiated completion bonds to support the film production.

The ten Marvel characters involved in the arrangement are Captain America,The Avengers, Nick Fury, Black Panther, Ant-Man, Cloak & Dagger, Dr. Strange, Hawkeye, Power Pack, and Shang-Chi.  Each film is expected to have a budget of between $50 and $165 million dollars, and the first release is expected in summer 2008. The credit facility will give Marvel greater profit potential, as it previously licensed its films to other studios.  Additionally, Marvel will gain complete creative control and the ability to build a film library.