The Walt Disney Company Plans Debt Sale To Bolster Finances During Park Closures

Over the last several weeks, Disney has taken out additional lines of credit in preparation for the coming months.

Disneyland Park Entrance

Disney recently released an update on their financial status in their quarterly earnings meeting. However, the company is seeking additional support funds as of today.

With the unprecedented closures, it is difficult for Disney to predict when and how the parks will return to “normal operation.”

The recent lines of credit that Disney has set up gave an additional $13 billion over the next year to work with, while the parks could be operating at limited capacity. On top of this credit, Deadline reports Disney filed a plan with the SEC to sell off some senior notes that were set to mature between 2026 and 2060.

Epcot

They have not announced the specific amount they are selling for haven’t been announced yet, but Moody’s Investor Service predicts they will be used “to pay outstanding debt as it matures.” Disney’s cash balance at the end of the second quarter in March was reportedly $14.3 billion and the company has a revolving loan capacity of $17.25 billion.

An empty Magic Kingdom ©Jonathan Salazar

Neil Begley, an analyst from Moody’s, said “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.”

©Disney

The second quarter financial report only accounted for two weeks of the U.S. parks’ closures, but those weeks resulted in an estimated loss of a half billion dollars. The cash reserves, lines of credit, and potential sale of the senior notes could give Disney the extra cash they need while their main streams of income are compromised.

When the parks re-open, which attraction will you visit first? Let us know in the comments.