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The Walt Disney Co. is bolstering its liquidity amid the novel coronavirus pandemic.
In a filing Monday with the SEC, Disney said that it had signed a new 364-day revolving credit agreement with Citibank that would provide access to as much as $5 billion. The agreement, which matures on April 9, 2021, can be extended for an additional year with the lenders’ consent.
Disney last month entered into a separate 364-day, $5.25 billion credit agreement, and a $3 billion, five-year credit agreement, giving the company access to more than $13 billion in fresh credit, should it be needed. It also has a $4 billion credit facility which matures in 2023.
“Disney has significant liquidity to help carry it through this ‘black swan’ crisis, Moodys senior vp Neil Begley wrote last month in a report.
Disney’s exposure to the pandemic is multifaceted, with its theme parks closed, sporting events on hold (which hurts ESPN), movie theaters shuttered and TV and film production on pause. On the other hand, the company’s streaming service Disney+ has hit 50 million subscribers, bolstered by its international rollout and people spending more time indoors amid worldwide stay-at-home orders.
The pandemic has led Disney, like most large companies, to increase its access to cash so that it can weather the storm and reopen quickly once the threat recedes.
To go along with its credit agreements, Disney raised $6 billion in a debt offering last month, as well as an additional $1.3 billion in a Canadian debt offering.
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