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The Walt Disney Company Raises $11 Billion in New Debt

*Grand Admiral Thrawn*

Well-Known Member
I believe that's approaching 20 billion now to stay afloat.
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It's truly nuts how much money Disney has.
 

Ravenclaw78

Well-Known Member
I believe that's approaching 20 billion now to stay afloat.
Except it's not to stay afloat. They have more than enough cash on hand to "stay afloat" without taking on additional debt. This is simply Disney taking advantage of unbelievably cheap credit to pay off existing debt with high interest rates or impending due dates without dipping into their reserves. It also serves as a statement to shareholders that Disney's financials remain strong and the banks have no concerns about the company being unable to pay back these new loans when they come due. But you already know that, it just doesn't fit your narrative to frame it that way.
 

WDW Pro

Well-Known Member
Except it's not to stay afloat. They have more than enough cash on hand to "stay afloat" without taking on additional debt. This is simply Disney taking advantage of unbelievably cheap credit to pay off existing debt with high interest rates or impending due dates without dipping into their reserves. It also serves as a statement to shareholders that Disney's financials remain strong and the banks have no concerns about the company being unable to pay back these new loans when they come due. But you already know that, it just doesn't fit your narrative to frame it that way.

In part I agree with you, but not completely. At the same time, an adequate response would take me significant time, and I'm not sure it would be a terribly interesting read... so I'll allocate my time elsewhere.
 

MAGICFLOP

Well-Known Member
Except it's not to stay afloat. They have more than enough cash on hand to "stay afloat" without taking on additional debt. This is simply Disney taking advantage of unbelievably cheap credit to pay off existing debt with high interest rates or impending due dates without dipping into their reserves. It also serves as a statement to shareholders that Disney's financials remain strong and the banks have no concerns about the company being unable to pay back these new loans when they come due. But you already know that, it just doesn't fit your narrative to frame it that way.
I am not so sure.. I am no way a financial wizard But, the article said to bolster liquidity.. and they are doing it with Moody's rating them A2, if they were truly no concern, then they would be Aaa, but A2 would be more a like a very small risk borrower.. If they need to bolster again before this is over, Moody's could put them to A3 or even Baa (truly speculation on my part)
 

MisterPenguin

Fully Pfizered!
Premium Member
I am not so sure.. I am no way a financial wizard But, the article said to bolster liquidity.. and they are doing it with Moody's rating them A2, if they were truly no concern, then they would be Aaa, but A2 would be more a like a very small risk borrower.. If they need to bolster again before this is over, Moody's could put them to A3 or even Baa (truly speculation on my part)

Their A2 rating is mostly because of the amount of debt they were holding before the COVID crisis. If they hadn't just bought Fox and increased their debt, I wouldn't expect this downgrade.

Bolstering liquidity is just shorthand for bringing more "cash on hand" on hand. Without the usual income, they still have to outlay cash for various things. Why sell off a bond making 3% interest for more cash on hand when you can get a loan for 1% and, at the same time, pay off the loans you have outstanding at 2%? [Numbers used just as an example.]

People who can afford to refi (they're still employed, business is still open) are doing so like crazy right now because of the low interest rates.
 

Disney Irish

Premium Member
Their A2 rating is mostly because of the amount of debt they were holding before the COVID crisis. If they hadn't just bought Fox and increased their debt, I wouldn't expect this downgrade.

Bolstering liquidity is just shorthand for bringing more "cash on hand" on hand. Without the usual income, they still have to outlay cash for various things. Why sell off a bond making 3% interest for more cash on hand when you can get a loan for 1% and, at the same time, pay off the loans you have outstanding at 2%? [Numbers used just as an example.]

People who can afford to refi (they're still employed, business is still open) are doing so like crazy right now because of the low interest rates.
Exactly, people are looking at this like Disney got another credit card on top of their existing credit cards, oh no! It makes a great headline, but in reality they are restructuring all their long term debts. Something that shows they are actual healthier than most are giving them credit for.
 

seascape

Well-Known Member
Exactly, people are looking at this like Disney got another credit card on top of their existing credit cards, oh no! It makes a great headline, but in reality they are restructuring all their long term debts. Something that shows they are actual healthier than most are giving them credit for.
I got a new credit card in February to have just in case. Zero percent on purchases for 15 months. I haven't used it yet but if I need to buy something big I will. It is just an insurance policy. Disney was very smart to lock in low rates because the odds are rates will be higher in a year.
 

MAGICFLOP

Well-Known Member
Bolstering liquidity is just shorthand for bringing more "cash on hand" on hand. Without the usual income, they still have to outlay cash for various things. Why sell off a bond making 3% interest for more cash on hand when you can get a loan for 1% and, at the same time, pay off the loans you have outstanding at 2%? [Numbers used just as an example.]

People who can afford to refi (they're still employed, business is still open) are doing so like crazy right now because of the low interest rates.

What you said makes sense, I will still raise you a dollar.... encompassing all you said, cheap money etc... you would agree that a financially healthy Disney would jump at this chance to complete the EPCOT projects. No more shuffling temporary passage ways and can work totally unobstructed, plus no chance of patrons getting hurt, plus bring this project in way ahead of schedule...
 

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