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LION - Lions Gate Entertainment: Arbitraging The Bond Spreads During The Business Separation
Lionheart III Corp
2024-06-11 09:17:08 ET
Summary
Lions Gate and Lions Studios are separating in two different entities by the end of the year, in order to simplify the corporate structure.
The 5.5% bonds due 2029 will be split between the two companies, and right now trade at a large spread that we believe is unjustified.
The bonds that will remain at the STARZ business trade at 10% spread over similarly-rated bonds despite leverage in the low 3.0x and significant deleveraging opportunities.