It looks like the credit crunch has taken its toll on at least one intangible investment project. According to the Financial Times, Deutsche Bank has scrapped its plan for a $450 million fund to finance film production at Paramount:
Liquidity has dried up and although film slate deals can generate lucrative returns, potential lenders are steering clear of asset classes that are not triple A rated.
. . .
But while the bank was able to assemble the equity and junior debt component, the credit freeze meant the bank could not generate interest in the deal's senior debt component.
In fact, Deutsche has decided to close its film finance unit. According to the New York Times, "Three executives who had been detailed to assemble film finance packages were informed of the closure about a week ago, according to a person who was briefed on the situation but spoke on condition of anonymity to avoid conflict with the studio."
And given the latest twist to the credit crunch - the bank solvency concern, it looks like market financing of intangibles might be on hold for awhile.
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