Disney Loans Theme Park Operator Euro Disney $1.7 Billion
The debt refinancing will give the French firm, in which Disney owns a 39.8 percent stake, more financial flexibility.
LONDON - The Walt Disney Co. has extended a $1.7 billion loan to European theme park operator Euro Disney, in which it owns a 39.8 percent stake, to help it refinance its debt.
The France-based company is the operator of Disneyland Paris. Saudi Prince Alwaleed also owns a 10 percent stake in the firm.
Credit ratings agency Moody's said the entertainment conglomerate's debt ratings would not be negatively impacted by the loan.
Disney will replace Euro Disney's existing debt with the loan, which is expected to be paid back over a longer period and carry a lower interest rate than the firm's existing debt to give it more financial flexibility.
"This refinancing will enable us to reduce our financing costs and give us greater investment and operational flexibility," Euro Disney CEO Philippe Gas said.
"Given the company's low cost of debt, there will be interest savings and net interest income for both Euro Disney and Disney," Moody's said in highlighting a benefit for both parties.
Moody's also argued that Disneyland Paris "has been and remains a core asset for Disney" and that the loan agreement "supports the company's brand protection initiatives, long-term organic growth prospects and better aligns the Disneyland Paris theme parks with its global brand and strategy."