New York: Paramount Skydance Corp. has attracted more than $109 billion in investor orders for its high-grade bond offering to help finance the acquisition of Warner Bros. Discovery, signalling strong demand for the debt despite the increased borrowing costs facing the media company.
Investors placed orders worth about 3.6 times the expected size of the investment-grade bond sale when the books closed on Tuesday, according to people familiar with the matter. The demand comes as banks work to complete the financing package for Paramount’s proposed Warner Bros. acquisition.
The bond offering forms the largest component of a broader $52 billion financing package that also includes high-yield bonds and loans. Paramount has reduced the planned size of its investment-grade bond sale by $2 billion to $30 billion and increased the loan component by the same amount.
Paramount plans $30 billion bond sale
The company is offering first-lien US dollar-denominated bonds through eight tranches, with maturities ranging from two years to 40 years.
The longest-dated bond is due in 2066. Initial pricing discussions put the spread for that security at around 3.65 percentage points above US Treasury yields, according to people familiar with the transaction.
Apollo Global Management, Bank of America and Citigroup are leading the offering, which was expected to be priced on Wednesday.
The financing comes after months of delays linked to legal challenges surrounding the Warner Bros. transaction. The debt and loan sales had initially been expected around the middle of the year but were put on hold as litigation complicated the proposed acquisition. Two settlements last week helped clear the way for the financing to proceed.
$52 billion financing package
Paramount’s broader financing package includes about $12.4 billion-equivalent of high-yield bonds denominated in US dollars and euros, along with approximately $7.5 billion-equivalent of loans in the two currencies.
Demand has also been strong for these portions of the financing. Investors placed orders of about $15.6 billion for the high-yield bonds and approximately $11.5 billion for the loans, according to people familiar with the matter.
The overall debt package highlights the scale of Paramount’s planned Warner Bros. acquisition, which would significantly expand the company’s entertainment operations and create one of the world’s largest media groups.
Warner Bros. deal drives borrowing needs
Paramount emerged as the successful bidder for Warner Bros. Discovery after a takeover battle earlier this year that also involved Netflix. The transaction has been valued at around $110 billion.
Apollo Global Management, Bank of America and Citigroup initially provided financing for the acquisition before distributing the debt to a group of 18 banks.
The proposed acquisition will substantially increase Paramount’s debt burden. Moody’s estimates that the transaction will add more than $30 billion of debt and push the company’s leverage to around seven times earnings.
Moody’s has therefore highlighted concerns about Paramount’s credit profile following the acquisition. The agency said the company’s post-deal credit metrics would resemble those of highly speculative issuers and pointed to high leverage and other risks in its assessment.
Credit ratings differ among agencies
Paramount’s proposed first-lien notes have received investment-grade ratings from Fitch Ratings and S&P Global Ratings.
Moody’s, however, has placed the debt one level below investment grade.
S&P assigned a BBB- rating to the first-lien debt and pointed to the Ellison family’s commitment to reduce leverage after the Warner acquisition. According to S&P, Paramount is targeting leverage of 3.75 times earnings by 2028 and three times by 2029.
The differing ratings underline the debate surrounding the company’s financial position following the large acquisition.
Higher Treasury yields raise financing costs
Paramount is also coming to the debt market at a time when rising US Treasury yields have increased borrowing costs for companies.
The delay in completing the financing means the company is raising debt later than initially planned and at a higher cost. The successful bond order book nevertheless indicates substantial investor interest in the securities.
The Paramount deal is among several large investment-grade bond transactions being used to finance mergers and acquisitions. The investment-grade market has remained active in recent weeks, with companies seeking funding for major corporate transactions.
Sysco Corp., for example, raised about $17 billion through notes issued in three currencies last week.
Demand remains strong despite leverage concerns
The more than $109 billion of orders for Paramount’s high-grade bond offering are significant because they exceed the amount of debt the company plans to sell by several times.
Bloomberg data cited in the report showed that investment-grade bond transactions in the relevant currencies have averaged around four times the deal size in 2026. Paramount’s 3.6-times order coverage is therefore below that average, but still represents substantial demand for the company’s debt.
The transaction also comes during a year in which large technology companies, particularly hyperscalers, have dominated the corporate bond market with huge debt sales to fund artificial intelligence infrastructure investments.
Paramount’s debt reduction targets
The success of the financing will allow Paramount to move closer to completing the funding requirements for the Warner Bros. acquisition, but reducing debt will remain an important financial objective after the transaction.
S&P’s BBB- rating reflects, among other factors, the Ellison family’s stated plan to reduce leverage to 3.75 times earnings by 2028 and three times by 2029.
Paramount’s ability to achieve those targets will depend on the performance of the combined business, cash generation and the pace at which debt can be reduced after the Warner acquisition.
The bond sale therefore represents not only a major financing milestone for the proposed media combination but also an important test of investor appetite for Paramount’s enlarged balance sheet.