Paramount to Accumulate an Extra $7.5 Billion In Debt for Warner's Purchase

Paramount Skydance will raise $7.5 billion in a loan consortium to finance its merger with Warner Bros. Discovery. The company announced on Thursday the launch of an incremental tranche of senior secured "B" type loans, which will be used to acquire $111 billion and pay down other debt.

In total, the company led by David Ellison intends to raise approximately US$44.4 billion in additional secured debt, on top of the financing already announced. The net proceeds, combined with available cash and previously disclosed capital raising, will finance the purchase of Warner Bros. Discovery and pay off existing debt.

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Morgan Stanley estimated in a report on Tuesday that the combined Paramount-Warner Bros. would have net debt of $77.2 billion at the end of 2026 on a pro forma basis. With the new loans, this projection is expected to rise.

The merger is nearing completion after an agreement with 12 state attorneys general to end the antitrust lawsuit. The judge in the case has scheduled a hearing for Thursday to review the consent decree. If approved, the deal should close in about two weeks.

The Block the Merger coalition filed an emergency request with Judge Martínez-Olguín so that interested parties can formally oppose the deal.

Larry Ellison, David's father, secured $46.7 billion in equity financing. Paramount also secured $24 billion in commitments from sovereign wealth funds in Saudi Arabia, Qatar, and the United Arab Emirates, which would hold 38.5% of the combined company.