Disney tapping the bond market


The recent stock market turmoil has sent lots of cash into the bond market seeking a safe refuge. The Walt Disney Company is set to pick up some of that cash.

With a strong credit rating, Disney is preparing to borrow about $1.85 billion in three parts. That may sound like a lot of money, but the giant company has $13 billion of debt and revenues last year of more than $38 billion.

Accordingly, Moody’s assigned an investment-grade A2 rating to the new bonds.

“Moody’s Investors Service assigned an A2 rating to The Walt Disney Company’s (“Disney”) proposed 3-tranche bond issuance. The $1.85 billion of new bonds will include three tranches, $750 million of 5 and 10-year bonds each and $350 million of 30-year bonds, and it is anticipated that they will be pari passu with the company’s existing senior unsecured indebtedness. Proceeds from the issuance will be used for general corporate purposes. The offering will further push out the company’s debt maturities, and will not affect the company’s long term-debt ratings as the transaction is not expected to have a material impact on the company’s strong credit metrics,” the ratings agency said.