"We believe that Disney's theme parks could recover more slowly than the overall global economy," S&P Global Ratings said.
S&P Global Ratings on Thursday downgraded Walt Disney Co.'s credit rating over concerns the coronavirus crisis will slow any reopening of the studio's shuttered theme parks and studio production.
"Continued government-imposed social distancing and, longer term, consumer concerns about attending public events will likely retard theme park attendance," the credit agency wrote in an April 23 note as it trimmed Disney's rating to an A-minus from A.
"We believe that Disney's theme parks could recover more slowly than the overall global economy," the credit rating agency additionally forecast. The Disneyland Resort and the Walt Disney World Resort are closed indefinitely amid the COVID-19 crisis after shuttering on March 14.
"Disney's theme parks won't likely return to normal capacity utilization at the same rate as the overall economy even after stay-at-home restrictions are eased and the theme parks are allowed to reopen," S&P Global Ratings argued. Disney is being kept on credit watch, with a negative outlook.
S&P Global Ratings added Disney's debt load is expected to climb to a leverage ratio of 3X over the next two years and only decline below that level during fiscal 2022.
