Disney Will Keep ZEBRA Bonds Caged : Entertainment: The company says falling interest rates scuttled the controversial sale. Analysts say the issue wouldn’t have been a good deal for investors.

Blaming declining interest rates, Walt Disney Co. announced Monday that it has withdrawn plans for an innovative--and controversial--bond offering tied to the performance of its television shows.

The Burbank-based company had hoped to raise $220 million for TV production from the $420-million offering of 15-year zero coupon bonds knows as ZEBRAS. The offering had a guaranteed yield of 4% but held the promise of up to a 20% return if Disney shows were sold into syndication.

Some analysts had argued that the plan was bad for investors, since only 15% of all prime-time network programming makes it into the syndication market. Critics also noted that such current Disney hits as “The Golden Girls” and “Empty Nest” weren’t included in the deal.

Disney said the decision to drop the offering was due strictly to a decline in interest rates precipitated by the Federal Reserve Board’s trimming of the discount rate Friday--a move intended to stimulate the stagnant economy. Disney apparently figured that it could raise money less expensively now.

The company did not announce an alternative borrowing plan, although analysts said Disney should have no trouble financing its television production.

“Obviously, our people feel that the recent sharp decline in interest rates makes that issue unnecessary,” Disney spokesman Tom Deegan said of the zero coupon bonds.

Disney had expected to receive Securities and Exchange Commission approval for the offering within days, according to Deegan. The bonds were to be sold by Merrill Lynch.

Disney’s decision raised the possibility that other planned offerings also will be affected by low interest rates. Analysts said it was too early to predict the full fallout but said Disney’s problems may have had more to do with the nature of its offering than the economy.

Lisbeth R. Barron, an entertainment industry analyst with S. G. Warburg & Co. in New York, said consumer skepticism might have doomed the offering if it had gone forward.

“The idea was excellent, but from the standpoint of the consumer--at least the educated consumer--the ability to get shows into reruns is very tough,” she said. “Theoretically, it would have been difficult for the buyer to get better than the 4% expected return.”

In addition to the “The Golden Girls” and “Empty Nest,” Disney’s prime-time network shows include “Blossom,” “Home Improvement,” “Dinosaurs,” “The Torkelsons,” “Nurses,” “Pacific Station,” “Herman’s Head” and “Walter and Emily.”

The company’s stock closed Monday at $109.75 a share on the New York Stock Exchange, up $3.75.