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Disney CFO says targets Single-A debt rating
Reuters, 01.30.03, 5:57 PM ET
LOS ANGELES, Jan 30 (Reuters) - The Walt Disney Co.'s (nyse: DIS - news - people) Chief Financial Officer Tom Staggs said on Thursday Disney will pursue modest debt reduction in the months ahead to get the company's debt rating back to a single-A level.
In a teleconference with analysts and reporters, Staggs added that Disney would not likely pursue acquisitions or other deals that would boost debt and dilute cash flow or earnings.
"Our overarching goal is that we would like to have a balance sheet consistent with the single-A category of ratings. ... That is certainly something that, over some time, we will get back to ... We will do it in a prudent manner," he said.
"You could look for modest debt reduction. What opportunity would make us want to postpone that move to a higher debt rating? I think the right answer is we aren't in the market right now for deals that dilute cash flow or earnings per share," he said. "At this point in time, in this environment, we think that is the right stance to take."
In October, Disney saw its long term debt rating cut to "Baa1" from "A3" by Moody's Investors Service and to "BBB-plus" from "A-minus" by Standard & Poor's. Fitch Ratings cut Disney's senior unsecured debt to "BBB+" from "A-" in August.
Copyright 2003, Reuters News Service
Reuters, 01.30.03, 5:57 PM ET
LOS ANGELES, Jan 30 (Reuters) - The Walt Disney Co.'s (nyse: DIS - news - people) Chief Financial Officer Tom Staggs said on Thursday Disney will pursue modest debt reduction in the months ahead to get the company's debt rating back to a single-A level.
In a teleconference with analysts and reporters, Staggs added that Disney would not likely pursue acquisitions or other deals that would boost debt and dilute cash flow or earnings.
"Our overarching goal is that we would like to have a balance sheet consistent with the single-A category of ratings. ... That is certainly something that, over some time, we will get back to ... We will do it in a prudent manner," he said.
"You could look for modest debt reduction. What opportunity would make us want to postpone that move to a higher debt rating? I think the right answer is we aren't in the market right now for deals that dilute cash flow or earnings per share," he said. "At this point in time, in this environment, we think that is the right stance to take."
In October, Disney saw its long term debt rating cut to "Baa1" from "A3" by Moody's Investors Service and to "BBB-plus" from "A-minus" by Standard & Poor's. Fitch Ratings cut Disney's senior unsecured debt to "BBB+" from "A-" in August.
Copyright 2003, Reuters News Service
