Paramount to Raise $7.5 Billion in Debt to Help Fund Warner Bros. Discovery Merger

Paramount Skydance is launching a syndication to raise $7.5 billion through a proposed senior secured incremental tranche of term “B” loans to help fund its $110 billion Warner Bros. Discovery merger and pay down certain existing debt. In total, the David Ellison-led media giant intends to raise approximately $44.4 billion of additional secured debt, in addition to previously announced financings, subject to market and other conditions. The move comes as Bank of America, Citigroup and Apollo have already committed to the deal’s $54 billion in debt financing, while three Middle Eastern sovereign wealth funds and LionTree Investment Fund, who will have no board seats or governance rights, committed to the $47 billion in equity financing. The equity financing is backstopped by the Ellison family and RedBird Capital Partners, with Larry Ellison previously making an “irrevocable personal guarantee.” Paramount is also reportedly considering tapping Elon Musk for an equity investment. The latest loans come as the combined company is already expected to carry around $80 billion in debt. It also comes just days after Paramount reached a settlement with 12 state attorneys general to resolve their antitrust litigation against the deal, which includes commitments to release at least 30 films per year and set up an editorial board oversee CNN and CBS News, among other things. On Thursday at 11 a.m. PT, Judge Araceli Martinez-Olguin has set a hearing to address “certain outstanding questions regarding the factual and legal underpinnings” of the proposed settlement, as well as its implementation. Groups involved in the Block the Merger coalition and The League of United Latin American Citizens (LULAC) have filed separate requests with the court to formally oppose and address their concerns with the consent decree. The Block the Merger coalition notes that the judge may rule on their motion during Thursday’s hearing as well. More to come…