Debt Securities: Disney Prospectus
The type of debt did Disney offers to the public for sale
Disney is known to offer debt securities to the public. Disney offers senior debt securities or subordinated debt securities. The debt securities offered to the public for sale by Disney may be issued separately or together or upon the conversion of or in exchange for, other securities. These debt securities by Disney may be senior subordinated, subordinated or junior subordinated. It is worth noting that Disney may issue these debt securities in different forms of series. The debt securities may be issued in one or more than one series.
There is also a clear indication of the possible limit in each of the securities’ series. This makes it easy for interested parties to understand how they are supposed to go about the process of purchasing the debt securities. This makes the process of marketing the securities much easier.
To ensure that securities of Disney are marketed successfully, there are certain rules set out for the purpose of issuance. For example, the senior debt securities are to be issued under a senior debt securities plan over time. On the other hand, a subordinated debt securities indenture is in place for the issuance of the subordinated debt securities. To make things easier, the company prefers addressing each of the security’s indentures individually as well as identifying each trustee specifically.
Dollar amount of debt Disney proposed to sell to the public
Disney proposed to sell a debt to the public amounting to $1,000,000,000. The denominations for the debt were $2,000 or any integral multiple of $1,000 in excess of $2,000
The percentage of the sales price Disney nets after discounts and commissions
After netting discounts and commissions, Disney’s percentage of sales price is 98.676%. This is arrived at by subtracting the percentage of commissions and discounts from the percentage of the original sales price.
Use of the proceeds from the sale of securities
In their prospectus, Disney indicated the areas where they intended to use the amount received from sale of the debt securities. The use of the proceeds would be in general corporate purposes. One of the areas where the proceeds of Disney would be used included utilization in reducing the company’s short-term indebtedness. This means that Disney would use some of the proceeds to settle part of the company’s short-term debt. This means that the level of the company’s short-term accounts payable would be debited after the realization of the sales proceeds. The other area where the proceeds of the sale of debt securities indicated in the prospectus would be funding investments. The proceeds would be very useful in allowing Disney in extending credit. This means that the company would be in a position to issue more credit to interested people in the public. Additionally, the company would use the proceeds from the sale of the debt securities to extend the subsidiaries. This means that the company would be able to have more subsidiaries or replenish the capital allocated to each subsidiary. This would be useful in the effort towards acquisition of a larger market share for Disney. This would allow the company to make more sales as well as increase the level of its profitability. In the prospectus of Disney, the proceeds from sale of the debt securities would also be used in acquiring other business entities. In the business world, acquisitions have been ranked as some of the best strategic moves for a company to pull so as to succeed (Monks & Lajoux, 2011). The company would benefit from the acquired business interests since their viability is well known due to their ongoing operations.
Reference
Monks, A. & Lajoux, R. (2011). Corporate Valuation for Portfolio Investment: Analyzing Assets, Earnings, John Wiley & Sons.
