Walt Disney on Monday disclosed that it has signed a fresh $5 billion, one year credit deal with Citibank, after the $6 billion it raised last month with the sale of debt securities.
The new credit deal is set to mature in April next year, which may be extended for another year. It provides for advances to be settled for one year to be used for general corporate purposes, Walt Disney bared in a filing with the Securities and Exchange Commission.
Walt Disney said the latest credit is close to the $5.25 billion and $3 billion credit agreements it signed on March 6, and comes as the company faces huge financial impacts from the current coronavirus crisis, as do the rest of Hollywood. The media and entertainment giant raised the funding via a bond offering.
The company has significant resources to help take it through this so-called "black swan crisis," Moodys senior vice president Neil Begley wrote in a study last March.
Walt Disney's exposure to the ongoing crisis is multi-pronged, with theme parks shut down, sporting events cancelled, film theaters shuttered and television and film production put on hold.
Disney+'s streaming service has reached 50 million subscribers, lifted by its international expansion and people spending more time at home in the face of social distancing and stay-at-home orders globally. The deal provides Walt Disney a whopping additional $11 billion in fresh funding.
Other companies were also turning to the debt market or drawing upon revolving credit lines as a cushion against the ill-effects and uncertain timeframe of the pandemic.
They have also acknowledged in the filings that the spread of the virus has a significant negative impact on their operations, and that the magnitude and length of the effect is still impossible to determine at the moment.
Health experts estimate the pandemic to plateau in the next few weeks, or more, with hopes of finding a vaccine to take a year and a half, or longer.
Meanwhile, Fox Corp. has successfully completed a $1.2 billion Senior Notes sale last week. Comcast has sold $6 billion worth of senior notes and Viacom CBS, with $2.5 billion.
Discovery has drawn a portion of a revolving credit facility, $500 million, to ensure it was available. AMC Entertainment has tapped its entire outstanding balance on two facilities, one in the US, and another in the UK.
Disney said it would furlough 43,000 Disney World employees beginning April 19. It also disclosed on April 2 that non-essential workers will be furloughed, though it would be the first time that a specific number has been scheduled for how many staff will be affected.
