Walt Disney Co. Downgraded by S&P on Park, Studio Closures

   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 [e-mail]

(END) Dow Jones Newswires

April 23, 2020 09:03 ET (13:03 GMT)

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