The Walt Disney Company Raises $6 Billion in Debt Offering After Warning Investors of Uncertainty Due to Coronavirus (COVID-19) Pandemic

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In a filing with the SEC today, Disney has announced that it has raised $6 billion in debt offerings for “general corporate purposes, including the repayment of indebtedness”.

Disney registered five different notes that will mature between 2025 and 2050 as follows:

  • $1.75B in 3.35% notes due 2025
  • $500M in 3.7% notes due 2027
  • $1.25B in 3.8% notes due 2030
  • $750M in 4.625% notes due 2040
  • $1.75B in 4.7% notes due 2050

According to The Hollywood Reporter, this new debt joins roughly $38 billion in long-term debt that the company held at the end of the previous fiscal year.

Investopedia says that a debt offering is essentially a promissory note to repay a certain amount of money in a defined timeline at an agreed upon interest rate. When a debt issue is made available, investors buy it from the seller who uses the funds to pursue its capital projects. In return, the investor is promised regular interest payments and also a repayment of the invested principal on a predetermined date in the future. Debt offerings are a way to raise money without diluting shares for a company like an equity stake would do.

This announcement comes just a day after Disney warned investors about the uncertainty that the Coronavirus (COVID-19) pandemic is bringing to just about every corner of their business.

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