Disney Enters I-Rate Swap Following Mega Bond Offering

  • 01 Mar 2002
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The Walt Disney Co. has entered an interest-rate swap on the back of a USD1.75 billion global bond offering last month, according to Thomas Staggs, cfo in Burbank, Calif. The company finalized the global bond sale in late February and had looked to do an interest-rate swap immediately following the offering. Instead, was forced to wait a couple weeks because it could not enter at a low enough rate he said, declining to elaborate.

In the swap Disney receives a fixed-rate of 7% and pays a floating-rate on the USD500 million 30-year portion of the bond offering, while leaving the remaining USD1.25 billion 10-year tranche in fixed. The 10-year tranche pays a 6.675% coupon. He declined to name the counterparty to the deal. JPMorgan and Salomon Smith Barney arranged the bond sale.

Staggs said Disney plans to use the proceeds to refinance commercial paper and short-term debt it raised last year to finance the purchase of Fox Family Worldwide for USD5.3 billion.Moody's Investors Service has assigned an A3 rating to Disney's senior debt.

  • 01 Mar 2002

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4 Goldman Sachs 257,185.44 862 5.92%
5 Barclays 252,851.12 991 5.82%

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4 BNP Paribas 30,600.75 184 5.27%
5 Barclays 30,394.96 86 5.23%

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4 UBS 16,643.68 66 6.85%
5 Goldman Sachs 16,179.39 87 6.66%