On March 3, 2023, The Walt Disney Company (the “Company”)
entered into a 364-Day Credit Agreement,
among the Company, as borrower, TWDC Enterprises 18 Corp. (“TWDC
Enterprises”), as guarantor, the lenders party thereto, and
Citibank, N.A., as designated agent, which provides for advances to
be made available to the Company in an aggregate principal amount
of up to $5.25 billion (the “Credit Agreement”), and replaces
the Company’s $5.25 billion 364-Day Credit
Agreement, dated as of March 4, 2022. The Credit Agreement is
unsecured and includes a guarantee by TWDC Enterprises of the
Company’s payment obligations, which guarantee is subject to
release and discharge upon certain circumstances. The Credit
Agreement supports the Company’s commercial paper borrowings and is
available for other general corporate purposes.
The Credit Agreement will expire on March 1, 2024. The Company
has the option to extend the maturity date of all or a portion of
advances outstanding at the time of maturity to February 28,
2025.
Borrowings under the Credit Agreement bear interest, at the
Company’s election, at (a) (i) for Advances denominated in
Dollars, Adjusted Term SOFR (which for an interest period of one
month, Term SOFR for such interest period, and for an interest
period of three or six months, Term SOFR for such interest period
plus 0.10%), (ii) for Advances denominated in Euro, the EURIBO
Rate, (iii) for Advances denominated in Yen, the TIBO Rate,
and (iv) for Advances denominated in Sterling, Daily Simple
SONIA, plus, in each case, an interest rate spread based on the
Company’s public debt rating that ranges between 0.625% and 1.000%
and (b) for Base Rate Advances (denominated in Dollars), the
Base Rate plus an interest rate spread of 0.000%. Capitalized terms
used, but not defined in the immediately preceding sentence, have
the meanings ascribed to each in the Credit Agreement. The Credit
Agreement also provides a mechanism to replace the interest rate
benchmark if the applicable benchmark is no longer available.
Advances under the Credit Agreement may be voluntarily prepaid
without penalty or premium, other than customary breakage costs
related to prepayments of Term SOFR, EURIBOR or TIBOR
borrowings.
The Credit Agreement, like the former facility, contains customary
affirmative and negative covenants for a facility of this type,
including, among others, covenants pertaining to the delivery of
financial statements, notices of default and certain other
information, payment of taxes, maintenance of existence, compliance
with laws, and limitations on mergers. The Credit Agreement
also requires the Company to maintain a minimum ratio of
Consolidated EBITDA to Consolidated Interest Expense (as such term
is defined in the respective Credit Agreement) of 3.00 to 1.00 as
of the last day of each period of four consecutive fiscal
quarters.
The Credit Agreement, as with the former facility, contains default
provisions customary for a facility of this type, which are subject
to customary grace periods and materiality thresholds, including,
among others, defaults related to payment failures, failure to
comply with covenants, material misrepresentations, defaults under
other material indebtedness, bankruptcy and related events,
material judgments and the failure of the guaranty to be in full
force and effect (other than as permitted under the Credit
Agreement). The Credit Agreement provides that if an event of
default occurs under the Credit Agreement, then the lenders may,
among other things, declare all amounts owing under the Credit
Agreement immediately due and payable. The Credit Agreement, as
with the former facility, specifically excludes certain entities,
including certain entities related to Hong Kong Disneyland and
Shanghai Disney Resort, from any representations, covenants or
events of default.
The foregoing description of the Credit Agreement does not purport
to be complete and is subject to, and qualified in its entirety by
reference to, the full text of the Credit Agreement, a copy of
which is attached hereto as Exhibit 10.1 and is incorporated herein
by reference.
| Item 9.01 |
Financial Statements and Exhibits
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(d) Exhibits