Christmas shopping
Media firms eager to secure better bond rates
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Disney issued a modest $300 million stocking stuffer in senior unsecured global bonds Monday, with proceeds earmarked for "general corporate purposes." Typically that means replacing earlier-maturing notes at higher rates or paying down debt to spruce up the balance sheet.
Ratings agency Fitch on Tuesday assigned a BBB+ rating on the Mouse's 15-year bonds, placing them on negative rating outlook, reflecting tight times at the theme parks and resorts business.
On the same day, super MSO Comcast filed to raise $10 billion with a mixed "shelf offering" that includes bonds as well as common and preferred stock shares. The filing allows the company to sell various securities at prices and terms to be determined at a later date.
Fresh capital
The cabler said proceeds would be used for working capital and other corporate purposes. Given Comcast's recent commitment to an aggressive, $5 billion cable-network upgrade program as well as a possible $5 billion acquisition of control of home shopping net QVC, a fresh supply of capital at better rates is probably essential. The company has $4.5 billion in bank debt coming due in 2003 and $3.2 billion in 2004.
Barry Diller's USA Interactive unexpectedly jumped into the market this week, issuing some $750 million in 10-year notes that will likely replace an estimated $550 million in debt that comes due in 2004.
U.S. firms have been flocking to the public debt for corporate bonds this month, capitalizing on record low interest rates and heavy demand for investment grade debt before end-of- year books are closed.
Analysts say much of the bond raising among entertainment firms is simply part of financial housekeeping and getting the best rates possible. However, an expected rush of asset trading in the first quarter of next year -- with properties such as QVC, DirecTV and possibly Viv U Entertainment likely to change hands -- will keep capital markets primed.
