UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 8.01 | Other Events |
On April 10, 2020, 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 billion (the “Credit Agreement”), the proceeds of which may be used for general corporate purposes. 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 applicable interest rate for borrowings under the Credit Agreement includes interest rate spreads based on the Company’s public debt rating that range between 0.875% and 1.500% for Eurocurrency Rate (as defined in the Credit Agreement) borrowings and 0.000% and 0.500% for Base Rate (as defined in the Credit Agreement) borrowings. The Credit Agreement also provides for a replacement rate for the Eurocurrency Rate if LIBOR is no longer available.
The Credit Agreement is scheduled to mature on April 9, 2021. The Company has the option to extend the maturity for an additional 364-day period from its then scheduled maturity date, subject to lenders’ consent. Advances may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of Eurocurrency Rate borrowings.
The Credit Agreement is substantially similar to the Company’s existing 364-Day Credit Agreement entered into on March 6, 2020, other than applicable interest rate spreads as described above and commitment fees. The Credit Agreement contains customary affirmative and negative covenants for facilities 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 each such term is defined in the Credit Agreement) of 3.00 to 1.00 as of the last day of each period of four consecutive fiscal quarters.
The Credit Agreement contains default provisions customary for facilities 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). If an event of default occurs under the Credit Agreement, then the lenders under Credit Agreement may, among other things, declare all amounts owing under the Credit Agreement immediately due and payable.
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, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit Number |
Description | |||
| 10.1 |
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| 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| The Walt Disney Company | ||
| By: |
/s/ Jolene E. Negre | |
| Jolene E. Negre | ||
| Associate General Counsel and Assistant Secretary |
Dated: April 13, 2020