Los Angeles Business Journal

Disney Sells $1.6 Billion in Bonds

By Deborah Crowe Wednesday, November 30, 2011

The Walt Disney Co. sold $1.6 billion in bonds this week as the Burbank entertainment giant took advantage of low interest rates to raise operating capital.

The sale completed Tuesday was done in two parts, with the company selling $1 billion of 0.875-percent coupon, 3-year notes priced to yield 0.986 percent, for a spread over Treasuries of 0.60 percentage points. It also sold 4.125-percent, 30-year bonds priced to yield 4.194 percent, for a spread to Treasuries of 1.25 percentage points, sources told Bloomberg News and the Wall Street Journal.

The latest debt sale follows a $1.85 billion bond sale in August and a $500 million sale of notes in May. Net proceeds from the sales are being used for general corporate purposes.

Companies have increased their borrowing in recent weeks as the cost to do so has dropped. Yields on investment-grade debt of 4.01 percent earlier this week compare with a record low of 3.45 percent in August, and are down from 4.15 percent on Oct. 11, according to Bank of America Merrill Lynch data.

Disney shares were up $1.37, or 4 percent, to $35.37 in midday trading on the New York Stock Exchange.