Disney revealed in a new SEC filing Monday that it entered into a 364-day loan agreement with Citibank for up to $5 billion last Friday, with the option to extend the term beyond April 9, 2021 if lenders agree. (Reuters) – Walt Disney Co said on Monday it had entered into a $5 billion unsecured credit contract at a time when companies in all sectors are trying to boost their liquidity to overcome the consequences of the coronavirus crisis. The company said in a bid here the credit contract, which has similar terms to another it entered on March 6, will be due on April 9, 2021, adding that the fund could be used for day-to-day operations. Disney – and other companies – have amassed a war box to see it through the coronavirus pandemic that has hit their divisions hard, from theme parks to production, live sports and advertising. The agreements give it $11 billion in fresh money. It raises so much money because it is particularly exposed to the carnage of COVID-19 and because it can be considered one of the largest and most creditworthy companies in the entertainment industry. In a statement filed Monday with the SEC, Disney said it had signed a new 364-day revolving credit agreement with Citibank, which would allow access to up to US$5 billion. The agreement, which is pending on April 9, 2021, may be extended for an additional year with the agreement of the lenders. Coronavirus and the social derealization measures that followed decimated the entertainment industry and influenced everything from production to post-production, theatre chains and festivals. One company that is taking proactive steps to make sure it gets by is Walt Disney Co. DIS, which has just signed a 364-day revolving credit contract with Citibank, which provides access to up to $5 billion. Fox Corp. last week completed the sale of senior notes worth $1.2 billion.
Comcast sold $6 billion to Senior Notes and ViacomCBS for $2.5 billion. Discovery withdrew part, $500 million, from a revolving credit facility to ensure it was available. AMC Entertainment has a strong track record of two locations here and one in the UK. Others also took into account the debt market or revolving credit facilities as a nestei against the serious economic effects and unknown duration of coronvirus, and acknowledged in the SEC submissions that the spread of the virus has a significant negative impact on their activities and that the magnitude and duration of the result are still not foreseeable. As a result of these conflicting trends, Disney still has much to fear as long as the virus harms the entertainment industry. At the same time, Disney`s access to large loans, the enduring value of its real estate and its growing streaming successes are promising signs of its ability to weather the economic storm. What the “House of the Mouse” needs to do in the meantime is find ways to stay afloat, which are independent of the crisis, and Disney investors hope its newly discovered credit availability will do so. The agreement could be extended for an additional year at maturity if lenders agreed, he said. Last month, Disney entered into a separate 364-day credit contract worth $US5.25 billion and a five-year, $3 billion credit contract that gives it access to more than $13 billion in fresh credit if necessary. In addition, the company has a $4 billion credit facility, which matures in 2023.
Citibank N.A. served as the designated agent for the deal, Walt Disney said. These credit contracts are due to the fact that Disney theme parks and resorts around the world are being closed to prevent the spread of COVID-19. In fiscal 2019, the Parks and Consumer Goods division generated more revenue than any other segment – $26.23 billion – or more than 37 percent of Disney`s revenue last year of $69.57 billion.