The Walt Disney Company Raises Nearly $6 Billion Through Sale Of Debt Securities

By Dan Anderson ● March 22, 2020
  • The Walt Disney Company has raised nearly $6 billion from the sale of debt securities, according to a filing with the SEC on Friday

The Walt Disney Company has raised nearly $6 billion from the sale of debt securities, according to a filing with the SEC on Friday. The debt offering is coming a week after Disney shut down its domestic theme parks. Plus the company also suspended its cruise ship sailings and a high-profile movie release (Mulan).

Disney is also raising the funds to support its debt structure. A number of companies are taking advantage of lower interest rates by raising cash during the economic crisis.

“The outbreak of the novel coronavirus… and measures to prevent its spread are affecting our business in a number of ways, which should be considered in connection with an investment in the notes,” wrote Disney in the Securities and Exchange Commission filing via LA Times. “We have closed our theme parks; suspended our cruises and theatrical shows; delayed theatrical distribution of films both domestically and internationally; and experienced supply chain disruption and ad sales impacts.”

Five tranches of notes were sold with various maturities ranging from 2025 to 2050 worth between $500 million and $1.75 billion with interest rates ranging between 3.35% to 4.7%. The issuance will likely be finalized on Monday.

This debt offering comes about a year after Disney closed the $71 billion acquisition of 21st Century Fox. This deal nearly doubled Disney’s debt to about $48 billion.

Disney also owns a majority stake in Hulu. And Disney also generates streaming video subscription revenues from Disney+ and ESPN+.

Since the pandemic caused many live sports to get canceled, ESPN has been having a hard time putting together compelling content. As a result, ESPN could lose a large portion of its advertising revenue.

With the proceeds, Disney is planning to restructure debt, acquire other companies, buy back shares, and invest in its business units.