Paramount Skydance Tightens Spreads on $30B Bond Sale to Fund Warner Bros. Discovery Deal

Paramount Skydance Corp. is tightening borrowing costs across all eight tranches of a $30 billion investment-grade bond offering to fund its acquisition of Warner Bros. Discovery Inc., according to Bloomberg. The 2066 bond, the longest-dated tranche, saw spreads compress by roughly 0.35 percentage points to 3.3 percentage points over Treasuries. The investment-grade offering is paired with $11.4 billion in high-yield bonds across three tranches, anchored by a $6 billion five-year note, plus an €885 million euro-denominated five-year note. Combined, the two offerings are set to raise $42.4 billion. Despite the tightening, financing costs remain elevated. Yields of at least 8% are expected on three investment-grade bonds — a level only two other U.S. high-grade securities reached this year. Paramount Skydance cut the investment-grade sale by $2 billion on September 29, shifting proceeds to an $8.5 billion loan, and pulled an eight-year euro junk bond from the package. The merger agreement requires Paramount Skydance to pay Warner Bros. Discovery shareholders roughly $7 million per day beginning October 1 for every day the transaction remains unclosed.