Walt Disney Co. Downgraded by S&P on Park, Studio Closures
April 23 2020 - 9:18AM
Dow Jones News
By Matt Grossman
Walt Disney Co.'s credit ratings were downgraded by S&P
Global Ratings on Thursday, a move that reflects the Covid-19
pandemic's impact on the company's theme parks and media studios,
S&P said.
The rating agency lowered by one notch Disney's issuer and
issue-level ratings, to A- from A. Both ratings remain within the
standard range for investment-grade debt, which is a rating of BBB-
or higher.
S&P kept Disney's ratings on credit-watch with negative
implications, citing uncertainty as to when the company can resume
normal operations.
S&P noted that Disney's theme parks, which account for about
30% of its revenue, are indefinitely closed. It also cited the
closure of Disney's film and television studios, which haven't been
able to complete production on new projects, S&P said. The
rating agency added that movie-theater closures also present an
obstacle to Disney film releases.
Moreover, one of Disney's television networks, ESPN, has lost
advertising revenue with cancellations of live sports, S&P
said.
S&P said that the future path of Disney's ratings will
depend in part on the company's ability to reduce its adjusted
leverage below 3x by its 2022 fiscal year.
Write to Matt Grossman at matt.grossman@wsj.com
(END) Dow Jones Newswires
April 23, 2020 09:03 ET (13:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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