Paramount Skydance has finalized a $52 billion debt package to fund its $110.9 billion acquisition of Warner Bros. Discovery. With the merger set to close on October 6, 2026, the company will carry approximately $80 billion in net debt. Investors are now focused on how the business will manage high interest costs and the integration of two major media entities.
Paramount Skydance has successfully raised $52 billion in debt, clearing the final major hurdle to complete its $110.9 billion acquisition of Warner Bros. Discovery. This financing, which follows a period of legal delays, ensures the merger is on track to officially close on October 6, 2026. The deal, supported by a banking group including Apollo Global Management, Bank of America, and Citigroup, attracted strong interest, with total investor orders exceeding $109 billion.
Debt Deal Structure
The financing package is a mix of different types of debt designed to cover the cash required for the acquisition. It includes roughly $30 billion in investment-grade debt, $12.4 billion in high-yield bonds, and $9.5 billion in term loans. While the strong demand from investors helped the company secure the funds, the process took longer than expected due to legal challenges. This delay forced the company to enter the market under different conditions, resulting in higher borrowing costs.
High Interest Costs and Debt Load
For investors, the most critical point of focus is the financial health of the combined entity. Once the merger is complete, the new company will be saddled with approximately $80 billion in net debt. To secure this financing in the current market, the company had to offer yields on some debt securities ranging from 8% to 9%.
These high interest rates mean the company will face a significant annual interest burden, which will take a portion of its operating cash flow to service. The company's ability to manage this debt, often referred to as debt pressure, while trying to grow its media and streaming operations, will be a central theme for the future.
Integration and Next Steps
Beyond the debt, the company faces the complex task of integrating two massive media businesses. Combining studios, streaming platforms, and other assets involves significant execution risk, where operational delays or cost increases could add further strain.
Following the scheduled close on October 6, investors will likely monitor management's plans for debt reduction, the company's ability to refinance its obligations, and whether the combined entity can improve its operating margins to offset the high interest costs. The primary monitorable for shareholders will be the company’s ability to generate steady cash flow to manage its $80 billion debt pile effectively.