Summary
The Walt Disney Company (DIS) filed an 8-K on March 10, 2020, to report the execution of two new credit agreements on March 6, 2020. These agreements are a $5.25 billion 364-day credit facility and a $3 billion five-year credit facility. These new facilities replace previous credit lines that were set to expire in March 2020 and March 2021, respectively. The primary purpose of these new credit lines is to support the company's commercial paper borrowings and provide liquidity for general corporate purposes. The terms and conditions, including covenants and financial reporting requirements, are substantially similar to the previous agreements, with adjustments made to reflect the acquisition of Twenty-First Century Fox. The new agreements include a guarantee from TWDC Enterprises.
Key Highlights
- 1Disney entered into a new $5.25 billion 364-day credit agreement, expiring March 5, 2021.
- 2Disney entered into a new $3 billion five-year credit agreement, expiring March 6, 2025.
- 3These new credit facilities replace existing facilities that were nearing expiration.
- 4The credit agreements are intended to support commercial paper borrowings and general corporate purposes.
- 5Key provisions, such as financial covenants (interest coverage) and borrowing rates (LIBOR-based), remain largely consistent with prior agreements.
- 6The agreements have been updated to reflect the acquisition of Twenty-First Century Fox.
- 7TWDC Enterprises provides a guarantee for the company's payment obligations under these new agreements.