The Walt Disney Co., reacting to the opportunity created by the record-low interest rates the Fed has vowed to keep in place through mid-2013, is selling $1.85 bilion in bonds, according to a Bloomberg report.
Strikingly, $350 million of the total will be in 30-year bonds, the first time in a decade the company has deployed such long-term bonds. The remainder of the theme-park and film company's offering is divided between $750 million each of five- and ten-year notes.
Disney has a war chest that’s more than ample for the foreseeable two to three years — Standard & Poor’s has praised its “exceptional liquidity” — but apparently wanted to take advantage of a presumed investor rush toward higher-yielding, long-term investments, even as major companies are taking advantage of some of the lowest borrowing costs on record.
This is Disney’s second major bond offering of 2011. The company issued $500 million of 10-year notes in May, after staying on the bond market sidelines for the prior two years. Disney last sold 30-year debt in 2002.
This kind of capital infusion may give further hope to film fans disturbed by last week's word that Disney had halted producer Jerry Bruckheimer’s "Lone Ranger" project tstarring Johnny Depp due to budget concerns. Bruckheimer and director Gore Verbinski may yet come to terms with the studio over its price tag.