Paramount Sells $52 Billion Debt for WBD Deal as 9% Junk Yield Signals Strain
Updated
Updated · Financial Times · Oct 2
Paramount Sells $52 Billion Debt for WBD Deal as 9% Junk Yield Signals Strain
3 articles · Updated · Financial Times · Oct 2
Summary
$52 billion of debt was sold Wednesday to help fund Paramount Skydance’s $110 billion acquisition of Warner Bros Discovery, despite a market hit by multi-decade Treasury yields and weaker risk appetite.
Investors demanded rich pricing: Paramount secured only the lowest investment-grade rating, and the junk tranche cleared at a 9% yield, above comparable bonds.
The skepticism reflects leverage and business risk — the combined company would carry about $80 billion of net debt against roughly $12 billion of annual EBITDA, with cash flow still tied to a declining legacy TV business.
Projected $6 billion in annual cost savings could be harder to retain if streaming competition intensifies, after Netflix signaled it would push growth faster and risk another costly content war.
A downgrade to junk could force investment-grade funds to sell, leaving creditors such as Apollo, Pimco and Man Group with greater influence over a balance sheet already burdened by expensive debt.