Disney Raises $11 Billion in Debt To Keep Things Running Amidst COVID-19 Closures
Disney has received a fresh round of debt to raise it’s financial position according to a recent post in DEADLINE. According to a recent SEC filing, the company has borrowed an additional $11 billion with interest rates ranging from 1.75% – 3.8%.
The majority of the debt was accrued through senior notes that are slated to mature between 2026 to 2060. As DEADLINE explains, companies often file plans to sell notes to pay down outstanding debt.
Disney’s current debt maturities for March were at $12.7 billion over the next 12 months. Analyst Neil Begley from Moody’s had this to say about Disney’s latest financial move, “We believe that the cash on hand and bank facilities will be more than adequate to meet all the company’s needs at this time and this transaction will only further bolster the company’s solid liquidity position which is important financial insurance since the crisis duration and economic knock-on effects are still unknown.”
Begley added, “This transaction will add to Disney’s significant liquidity as it will free up revolving debt capacity otherwise assumed set aside to back outstanding commercial paper and near-term maturities, and essentially removes any question that the company has robust liquidity to help carry it through this ‘black swan’ cycle caused by the spread of COVID-19.”
As a result of this recent deal, Moody’s assigned an A2 rating, this is the low end of the top long-term rating.
This is a story that we’ll continue to follow here at MickeyBlog. Readers are encouraged to keep following along for the latest news and updates!
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