Disney Debts Keep Mounting As They Enter $5 Billion Credit Agreement with Citibank

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Walt Disney Company Stock Dropping

On Friday, April 19, 2020, the Walt Disney Company entered into a 364-Day Credit Agreement with Citibank for up to $5 billion.

According to the filing:

The proceeds of which may be used for general corporate purposes. The Credit Agreement is unsecured and includes a guarantee by TWDC Enterprises of the Company’s payment obligations, which guarantee is subject to release and discharge upon certain circumstances.

The interest rate is to be based on the company’s “public debt rating that range between 0.875% and 1.500% for Eurocurrency Rate (as defined in the Credit Agreement) borrowings and 0.000% and 0.500% for Base Rate (as defined in the Credit Agreement) borrowings

Seeking Alpha has a copy of the agreement that was filed HERE.

This agreement is set to “mature” on April 9, 2021, but Disney has the option to extend the maturity for an extra 364-day period subject to Citibank’s consent.  The agreement also states that “Advances may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of Eurocurrency Rate borrowings.

This puts Disney over $12 billion in borrowed funds between this deal and the prior Debt Market deals in the United States and Canada.  Disney needs movies and the parks to come back online as soon as possible, but it’s looking more and more like we will have shut-downs into early summer and possibly longer.

Hopefully they don’t have to continue to borrow more.

What do you think? Comment and let us know.

Source: Seeking Alpha, WDWNT

 


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Kambrea Pratt
Disney has been a big part of my life for years--from family trips to WDW to growing up on Disney classics, TV, and movies. Prior to Pirates and Princesses I successfully ran social media and websites since 2010. I've also been a public speaker and presenter since 2007. I'm the co-host for the YouTube channel Clownfish TV as well as the podcast/ Youtube Pirates and Princesses (PNP) channel. Former contributor, online personality and acting social media manager at The Kingdom Insider (which we built from the ground up and ran from 2017-2019 --Thom didn't quit FYI) Pirates and Princesses was started by my husband and I several years ago. We loved Disney and wanted to honestly cover all aspects from pop-culture to the parks from a consumer focused stance. Living OUR happily ever after getting to do what we love with our two kids! Creating fun content and building new things. Certified art teacher, and mom. Opinions are all mine.