Paramount rolls out $44 billion bond sale to fund Warner Bros. takeover

Paramount Skydance Corp. has initiated the sale of over $44 billion in bonds to finance its acquisition of Warner Bros. Discovery Inc., marking the largest M&A financing deal of the year, according to Bloomberg. Investment banks Bank of America Corp. and Citigroup Inc. will host investor calls on Monday to discuss a $32 billion offering of investment-grade debt and $12.4 billion in high-yield bonds.

The $52 billion financing package also includes $7.5 billion in loans, which began marketing last week. Paramount plans to offer eight tranches of US dollar-denominated investment-grade bonds with maturities ranging from 2 to 40 years, while the high-yield portion includes two euro-denominated tranches maturing in 5 and 8 years, and three US dollar tranches due in 5, 8, and 10 years.

The 10-year dollar notes are anticipated to have a yield in the low-9% range. The bond and loan sale comes as US Treasury yields hit fresh multidecade highs, driven by geopolitical tensions and concerns over inflation and potential Federal Reserve rate hikes. The financing deal had been delayed due to lawsuits from 12 state attorneys general and the Writers Guild trade union, but settlement agreements reached last week cleared the way for the sale.

The junk-bond offering is expected to be the largest high-yield bond deal on record, surpassing SoftBank Group Corp.'s recent sale. Paramount aims to finalize all bond and loan pricing by Wednesday, with the $110 billion takeover deadline set for October. Delayed completion would require Warner Bros. shareholders to pay Paramount $7 million per day.