Disney to raise $4 billion, first high-grade deal since 2020

(Bloomberg) — Walt Disney Co. (DIS) is selling $4 billion of investment-grade notes, its first deal since 2020, joining a record rush of activity as companies lock in lower borrowing premiums.

Tuesday’s offering is in four parts, according to a person familiar with the matter. Pricing on the longest part of the deal — a bond maturing in 2036 — tightened to 0.58 percentage point above Treasuries, down from initial talk of around 0.85 percentage point.

Proceeds will go toward general corporate purposes, and the deal is expected to price today.

Disney is likely to use the cash mainly to repay debt and aid “liquidity for increased shareholder returns and strategic investments,” according to Bloomberg Intelligence. The company has $2.6 billion of bonds and loans due the rest of this year, data compiled by Bloomberg shows.

The firm in 2023 unveiled a $60 billion, 10-year investment effort that includes nearly doubling its ship fleet and opening its first theme park in the Middle East.

Disney announced last week that the head of its theme parks, cruise ships and consumer-products division will replace Bob Iger as chief executive officer next month. The change comes at a critical time for the company, as the parent of ABC and ESPN deals with the media industry’s shift to the streaming era.

The bond sale is among eight in the US investment-grade market Tuesday marketing a total of $11.3 billion, coming a day after Alphabet Inc. raised $20 billion from a debt offering that generated more than $100 billion of demand.

BNP Paribas SA, Citigroup Inc, Deutsche Bank AG, JPMorgan Chase & Co., Sumitomo Mitsui Banking Corp. and U.S. Bancorp are bookrunners for the Disney deal, the person said. The notes will be rated A by S&P Global Ratings and are expected to be graded A2 by Moody’s Ratings.

Issuer Profile

Debt distribution: DIS US Equity DDIS

Capital structure: DIS US Equity CAST

Related securities: DIS US Equity RELS

Ratings history: DIS US Equity CRPR

(Updates launch details in the first two paragraphs and total high-grade bond offerings in second to last paragraph.)

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