Walt Disney enters into $8.25 billion of 364-day, five-year loans

By Sarah Lizee

Olympia, Wash., March 11 – Walt Disney Co. entered on Friday into a new $5.25 billion 364-day credit agreement and a new $3 billion five-year credit agreement, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreements support the company’s commercial paper borrowings and are available for other general corporate purposes.

The new 364-day credit agreement replaces the $6 billion 364-day credit agreement scheduled to expire March 6, and the new five-year credit agreement replaces the $2.25 billion five-year credit agreement scheduled to expire March 11, 2021.

The new 364-day credit agreement will expire on March 5, 2021. As with the former facility, the borrower has the option to extend the maturity date of all or a portion of advances outstanding at the time of maturity for one year. The new five-year credit agreement will expire on March 6, 2025.

Interest is equal to Libor plus a margin equal to the credit default swap spread applicable to the company’s long-term senior debt, subject to a minimum margin that ranges from 15 basis points to 50 bps and a maximum margin that ranges from 75 bps to 150 bps. The floor and the cap depend on the company’s debt rating. The commitment fee ranges from 3 bps to 6 bps, based on ratings.

The commitment fee on the 364-day facility ranges from 3 bps to 6 bps, and the commitment fee on the five-year facility ranges from 5 bps to 12.5 bps, in each case based on ratings.

The new facilities, as with the former facilities, contain only one financial covenant, relating to interest coverage, and specifically excludes some entities, including Hong Kong Disneyland and Shanghai Disney Resort, from any representations, covenants or events of default.

Citigroup Global Markets Inc., JPMorgan Chase Bank, NA, BNP Paribas Securities Corp. and Deutsche Bank Securities Inc. are joint lead arrangers and joint bookrunners, with Citibank, NA and JPMorgan as co-administrative agents.

BNP and Deutsche are co-syndication agents. Bank of America, NA, Credit Suisse AG, Cayman Islands Branch, Goldman Sachs Bank USA, HSBC Bank USA, NA, Mizuho Bank, Ltd. Morgan Stanley MUFG Loan Partners, LLC, Royal Bank of Canada, Societe Generale, Sumitomo Mitsui Banking Corp., TD Securities (USA) LLC, Truist Bank, U.S. Bank, NA and Wells Fargo Bank, NA are co-documentation agents.

Agricultural Bank of China Ltd., New York Branch, Banco Santander, SA, New York Branch, Bank of China, Los Angeles Branch, Industrial and Commercial Bank of China Ltd., New York Branch, ING Bank NV, Dublin Branch and Standard Chartered Bank are managing agents.

The entertainment and media company is based in Burbank, Calif.

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