Paramount Skydance's $7.5 billion Term B loan, a component of its larger financing package for the acquisition of Warner Bros. Discovery, has seen strong investor demand. Prior to its official launch, banks have already received approximately $11.5 billion in orders for the loan.
This early demand suggests confidence in the deal, which is one of the largest M&A debt raises in recent years. The Term B loan is part of a broader $44 billion to $49 billion debt package that includes investment-grade bonds, investment-grade loans, and second-lien bonds, targeting a diverse range of investors. This combined offering of high-grade and junk debt is unusual for a leveraged buyout.
The overall financing for the Warner Bros. Discovery acquisition, valued at an enterprise value of around $110 billion, includes up to $46.7 billion in equity funding from entities like the Lawrence J. Ellison Revocable Trust and RedBird Capital, along with significant debt. The deal has faced scrutiny, particularly regarding the merged company's projected long-term debt of over $80 billion and annual interest expenses exceeding $6 billion.
The robust demand for the Term B loan comes as Paramount navigates the final hurdles for the acquisition, including a federal judge's approval of a settlement in an antitrust lawsuit. The company aims to use the proceeds from these borrowings, along with cash on hand and equity financing, to fund the purchase price and repay existing debt.
Bank of America Corp. and Citigroup are among the key institutions marketing this substantial debt offering, with the expectation that the full debt package will sell down quickly once officially launched. The terms of the proposed financing are subject to market conditions and the finalization of the acquisition.
