Warner Bros. Studios in Burbank, California, on November 26, 2025.
Bank of America Corp. and Citigroup Inc. are talking to investors about the makeup of the debt package financing Paramount Skydance Corp.'s acquisition of Warner Bros. Discovery Inc., with early conversations including about US$30 billion of high-grade bonds, around $12 billion of junk bonds, and $7.5 billion of loans. The roughly $50 billion in financing, one of the most highly-anticipated offerings of the year, may start as soon as the next couple of weeks. Its timing coincides with strong demand for credit despite a volatile macro backdrop.
The banks are looking to sell about $30 billion of investment-grade notes in multiple parts, including three- and 10-year portions, according to people with knowledge of the matter. Early pricing discussions on the 10-year tranche are 2.5 to 2.75 percentage points above the benchmark rate, they said. The breakdown and details of the debt offerings may change, said the people, asking not to be identified because they're not authorized to speak publicly.
A spokesperson for Bank of America declined to comment. Spokespeople for Citigroup and Paramount didn't return requests for comment.
Apollo Global Management Inc., Bank of America, and Citigroup provided the initial financing for the deal—originally set at $57.5 billion, consisting of a $54 billion temporary funding and $3.5 billion one-year revolving credit facility. In April, BofA and Citi sold down the financing—by then reduced to $49 billion—to a group of 18 banks. Now those banks are looking to reduce the risk on their balance sheets, as the short-term financing known as bridge loans are replaced with a combination of investment-grade and junk debt.
The debt package being pitched now also includes about $7.5 billion of loans that will be denominated in U.S. dollars and euros. During this early stage of the marketing process, the U.S. loans are being sounded out at 3 percentage points above the benchmark rate, at a discounted price of about 99 cents on the dollar, the people added. The financing will also include roughly $12 billion of high-yield bonds that will also be split between the same two currencies, with maturities of five, eight, and 10 years, said the people. The majority of that, about $10 billion, is expected to be in U.S. dollars and the remainder in euros, the people added. The junk bonds will be second-lien notes.
Bank of America is managing the junk-bond offering, and Citigroup is running the loan sale, with both banks leading the high-grade bond issue, the people said.
The deal is one of the largest merger-and-acquisition (M&A) financings in recent years. Warner Brothers was the object of a bidding war that ended earlier this year, with Paramount beating out Netflix Inc. in a $110 billion transaction to create one of the world's largest entertainment empires.
| PORTION OF DEBT OFFERING | MATURITIES | EARLY PRICING DISCUSSIONS |
|---|---|---|
| approx. $30 billion of investment-grade bonds | Include 3-years and 10-years | 10-year pitched at T+250-275bps |
| approx. $12 billion of second-lien junk bonds in U.S. dollars and euros (about $10 billion expected to be in dollars) | 5-years, 8-years, 10-years | TBD |
| approx. $7.5 billion of loans in U.S. dollars and euros | N/A | SOFR+300bps, 99 cents on the dollar |
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