GUAM AGENCY GUARANTEES LOAN TO FILM MAKER

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By Gaynor Dumat-ol Daleno

HAGATNA, Guam (Pacific Daily News, May 7) - The Guam Economic Development and Commerce Authority board yesterday voted to guarantee $800,000 out of almost $1.3 million that the movie company filming "Max Havoc: Curse of the Dragon" is borrowing from a Detroit-based bank.

GEDCA Administrator Gerald Perez said the GEDCA board made the decision after much discussion about the risks and the merits of helping establish the foundation for a film industry on Guam.

Guam's infrastructure and work force have not been set up to accommodate the movie-making industry, so the guarantee helped to convince the "Max Havoc: Curse of the Dragon" movie producer -- and the bank from whom it's borrowing money -- to have some level of comfort in Guam as the location, Perez said.

The guarantee means that if Guam Motion Picture Co. defaults, the economic agency will be responsible for paying up to $800,000 of the $1.3 million.

Perez said before the GEDCA board approved making the agency the guarantor, thorough research was made to ensure that the proposed borrower had a good credit rating and will have the means to pay.

Guam Motion Picture Co. is borrowing from Comerica, a Detroit-headquartered bank that has issued about $500 million in movie-making-related loans a year, Perez said. Comerica is among the 20 largest U.S. banking companies, with $55 billion in total assets as of March 2004, according to the bank's Web site, www.comerica.com.

"The board felt it's always a risk getting into new things like this, but the board took comfort in the fact that it was Comerica that is the lending institution and that the terms and conditions would make this a reasonable risk," he said.

Perez also said the amount of GEDCA's guarantee also diminishes as Guam Motion Picture Co. generates revenue.

The company expects pre-sales revenue of about $250,000, and $200,000 of that will reduce GEDCA's exposure on the loan from $800,000 to $600,000, Perez said.

The source of funds for GEDCA will be from a federally funded program whose purpose is to stimulate new business and new industries for Guam, Perez said.

"One of the opportunities that has been identified is making Guam a venue for producing film commercials or feature films or TV film series, but we don't have the infrastructure, so what this project does is really a means to an end," Perez said.

Independent distributor Rigel USA established the Guam Motion Picture Co. to shoot and distribute at least two English-language theatrical feature films and two travel documentaries.

"Max Havoc" Director Albert Pyun has said the projects have the potential to create more than 300 jobs for island residents.

A lot of the local residents who have been hired, Perez said, "are performing beautifully according to the producer." Extras and support staff for the movie were among the local workers hired or are being hired.

May 7, 2004

Pacific Daily News: www.guampdn.com

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