Paramount has launched syndication of a proposed $7.5 billion senior secured term loan as it builds the financing package for its acquisition of Warner Bros. Discovery.
The proposed incremental Term B facility is subject to market and other conditions.
Paramount said it also intends to raise approximately $44.4 billion of additional secured debt beyond the $7.5 billion facility and previously announced financing. Proceeds would be combined with cash and equity financing to fund the Warner Bros. Discovery purchase and refinance certain existing debt.
The financing follows Paramount’s settlement of litigation brought by California and other states and the Writers Guild of America over its approximately $110 billion Warner Bros. Discovery transaction.
Those settlements cleared major domestic legal obstacles to the acquisition.
The combined company is expected to carry approximately $80 billion of debt after completion of the transaction.
That makes the financing structure itself increasingly important for investors.
Large leveraged acquisitions depend not only on regulatory approval but also on the borrower’s ability to place debt at acceptable rates. That challenge becomes more significant when global government-bond yields and corporate borrowing costs are elevated.
Paramount’s own announcement emphasizes that the proposed financing remains subject to market and other conditions. Interest rates, maturities and other terms for several components of the broader debt package have not yet been finalized.
Markets will now focus on investor demand for the term loan, the pricing of the broader financing package and the eventual debt burden carried by the combined media company.
