Moody’s: Disney’s Star Wars release is positive

Moody's Investors Service said says that Walt Disney Co.’s release of its first Star Wars film since acquiring Lucasfilm for $4 billion in December 2012 positively affects the company's credit.

The highly anticipated release is expected to be a box-office mega hit like no other, and is likely to set the stage and demonstrate that the 2012 acquisition will be highly lucrative.

Moody's does not anticipate that Disney's A2 senior unsecured debt rating, Prime-1 short term debt rating and stable outlook will be directly affected by the expected success of the Star Wars release, as it believes the company will sustain a constant leverage range between 1.5 and 2 times (including Moody's standard adjustments).

"We expect the Star Wars IP to generate significant cash flows for Disney, but we do not anticipate any material de-leveraging as cash and additional financial flexibility will likely be utilized via distributions to shareholders," Moody's senior vice president Neil Begley said in a news release.

"However, the Star Wars franchise is uniquely multi-beneficial to Disney and clearly the evergreen intellectual property further diversifies and strengthens the company's foundation alongside its most important franchises, such as its traditional characters like Mickey Mouse, its new characters like those in Frozen, its Marvel characters franchise and its Pixar CG animation franchise."

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