Paramount Skydance is gearing up to sell one of the largest debt packages in corporate history as it moves to close its acquisition of Warner Bros. Discovery, a deal valued at roughly $110 billion in enterprise value. The combined entity is expected to carry somewhere between $79 billion and $87 billion in total debt after closing.
The financing puzzle
Bank of America and Citigroup are among the major banks that have committed between $54 billion and $57.5 billion in debt financing to get the deal across the finish line. Private equity capital is also part of the mix.
The post-merger leverage ratio is projected to land at approximately 6 to 6.5 times EBITDA. For every dollar the combined company earns before interest, taxes, depreciation, and amortization, it will owe about six dollars in debt.
Bondholders have already granted consent for amendments to existing debt terms in light of the merger, which removes one potential obstacle.
