Walt Disney (DIS) - Get Report has secured a new credit agreement with Citigroup for as much as $5 billion to help tide it over economically as its theme parks remain shuttered and its cruise ships docked.
The $5 billion facility, disclosed in a Securities and Exchange Commission filing on Monday, will be used for “general corporate purposes,” the company said.
The credit line is similar to the company’s existing one-year credit line, which it tapped on March 6 ahead of the coronavirus wave that shuttered its lucrative U.S. theme parks and other operations globally.
To be sure, it has not been a magical 2020 for Disney, which started off the year with its stock at record highs amid strong demand for its Disney+ streaming service, but quickly turned south as the pandemic affected business, in particular its theme parks and cruises.
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In addition to scuttling its travel experiences, movie theater closures have cut ticket sales, while the suspension of almost all major league sports has cut into its ESPN programming. Disney Chairman Bob Iger also abruptly stepped down as CEO earlier this year.
Shares of Disney have fallen about 30% year to date.
A silver lining has been Disney+, which continues to exceed expectations as millions confined to their homes sign up for the service.
Disney recently said it appears on track to meet its longer-term subscriber target of between 60 million and 90 million paid Disney+ subscribers by 2024.
Shares of Disney were up 2.47% $106.10 in trading on Tuesday.
Disney is a holding in Jim Cramer's Action Alerts PLUS member club.