Warner Bros. Discovery finalises $15 billion leveraged loan ahead of Paramount Skydance deal
The $15 billion-equivalent facility, comprising a $13 billion US dollar tranche and a €1.717 billion euro tranche, will refinance a bridge loan taken out last year to prepare for its acquisition by Paramount Skydance Corp.
Warner Bros. Discovery has finalised a $15 billion-equivalent cross-border Term Loan B financing, establishing the transaction as the largest leveraged loan deal since the Global Financial Crisis. The issuance represents the largest loan ever issued by a non-sponsored borrower and stands as the second-largest Term Loan B syndication in history, trailing only the $16.45 billion TXU deal executed in 2007.
The facility consists of a $13 billion US dollar-denominated tranche and a €1.717 billion euro tranche. Proceeds from the deal are designated to refinance a bridge loan obtained last year, which was secured in preparation for Warner Bros. Discovery’s acquisition by Paramount Skydance Corp. The transaction was upsized from initial launch tranche sizes of $5 billion and €1 billion, reflecting strong investor appetite despite a generally dry season for new merger and acquisition supply.
Final pricing for the seven-year term loans was set tight to talk at S/E+250 with a 99.75 Original Issue Discount. This represents a tighter spread than the launch guidance of S/E+275-300 at 99. The deal also tops Broadcom’s November 2015 transaction, which totalled $10.74 billion across US and European facilities, as the largest post-Global Financial Crisis Term Loan B transaction by both total facility size and US dollar tranche size.
The sheer scale of the Warner Bros. Discovery issuance has significantly distorted May volume figures. As of May 27, the company accounted for 73% of the total institutional loan supply in the US from leveraged buyout and merger and acquisition transactions, which totalled $17.7 billion. Corporate merger and acquisition volume reached $15.1 billion in May, the highest monthly figure since January 2020 and exceeding the combined total of the preceding four months.
The financing emerges as the leveraged loan market shows signs of recovery, with investors increasingly favouring higher-quality borrowers. Speculative-grade borrowers repriced $50.5 billion of term loans in May, with BB- rated companies accounting for 51% of that volume. As of May 26, 63% of loans from BB- rated borrowers in the Morningstar LSTA US Leveraged Loan Index were priced at par or higher, a marked improvement from a low of 13% in late March and early April.
