Tokyo Disneyland has requested and been granted an increase on their catastrophic line of credit. The $1.3B line of credit represents a 50% increase in their existing allowance, according to website nikkei.com.
The line of credit would let the Oriental Land Company completely shut down the park for six months while still being able to cover personnel costs, capital investment payments, and even continued investment in the expansion of the park.
A move like this isn’t new for the Oriental Land Company. In 1999, it became the first non-financial company in Japan to get a catastrophe bond.
Of course, back in 2011, planned power outages after a tsunami devastated northeast Japan forced Tokyo Disney Resort to shut down for over a month. The resort lost an estimated $400 million in profits during the closure.
The new line of credit carries an annual fee of 300 million yen, which is less than half of one percent of the resort’s operating profit.