Paramount Skydance Corp. has spent months in talks with investors over the debt package funding its Warner Bros. Discovery acquisition, and the delay is proving extremely costly.
Growing fears about global inflation have pushed borrowing rates higher, meaning the company will pay hundreds of millions of dollars more annually in interest than it would have three months ago.
Estimates for the additional annual interest burden range from $250 million to more than half a billion dollars, a significant financial penalty for the prolonged timeline.
Lawsuits had previously blocked Paramount from completing the $110 billion acquisition sooner, forcing the company into a much more expensive borrowing environment.
Paramount began marketing a massive $44.4 billion debt offering to investors while awaiting a federal judge’s decision, which remains the last remaining hurdle before the deal can close.
The full financing package totals approximately $52 billion and includes roughly $32 billion of investment-grade bonds, about $12.4 billion of high-yield bonds, and a $7.5 billion term loan.
The riskier $12.4 billion-equivalent junk bond portion, which ranks as the biggest high-yield offering on record, attracted more than $23 billion in investor orders despite yields reaching as high as around 9%.
The 10-year dollar bonds in the high-yield portion were marketed in the low 9% range, against a 10-year Treasury yield of 5.17% on September 25.
S&P Global Ratings downgraded Paramount to BB from BB+ on September 24, 2026, and expects the company’s leverage to remain around 7.6 times EBITDA through 2027.
Adding further pressure, Paramount must pay Warner Bros. Discovery shareholders roughly $7 million per day beginning October 1 for every day the transaction remains unclosed under the merger agreement.
Oracle founder Larry Ellison has personally guaranteed $46.7 billion in equity financing for the Warner Bros. Discovery takeover, underscoring the enormous financial commitments behind the deal.
Paramount has also secured $24 billion in commitments from the sovereign wealth funds of Saudi Arabia, Qatar, and the United Arab Emirates, with the broader equity investment totaling $47 billion.
Once finalized, the combined company will control two major Hollywood studios, two subscription streaming services, and dozens of television channels ranging from CBS to HBO.
