NEW YORK — Paramount Skydance has obtained sufficient demand for its $44 billion debt offering, but the financing for its $110 billion acquisition of Warner Bros. Discovery requires yields as high as 9 percent to attract investor interest. This elevated borrowing cost reflects the current financial landscape and adds scrutiny to the merger's projected synergies.
The debt offering, filed with the Securities and Exchange Commission on Monday, Sept. 28, 2026, is structured with $32 billion in investment-grade debt and $12.4 billion in high-yield bonds. These proceeds will combine with equity, term loan financing and existing cash to fund the total purchase price. An additional $7.5 billion term loan brings the full financing package to approximately $52 billion.
The financing moves forward despite outstanding regulatory hurdles. U.S. District Judge Araceli Martinez-Olguin has yet to approve a settlement between Paramount Skydance and 12 state attorneys general, including California AG Rob Bonta. This settlement would clear the final regulatory condition for the merger.
Judge Martinez-Olguin declined to approve the settlement at a Sept. 24 hearing, instead allowing additional amicus briefs to be filed by Monday. She has not provided a timetable for her decision. Paramount acknowledged this uncertainty in its SEC filing, stating, “The actual closing date of the acquisition is uncertain.”
Paramount’s SEC filing specifies the merger “will only be consummated following the satisfaction or waiver of the closing conditions in the WBD merger agreement.” For filing purposes, the company estimates an Oct. 7 closing date. This would result in approximately $49 million in ticking fees paid to Warner Bros. Discovery shareholders for that week.
These ticking fees would be in addition to a $31 per share payout and vested WBD equity awards, totaling less than $80 billion in payments to shareholders. Following the merger, the combined Paramount Warner company is projected to carry $80 billion in debt.
CEO David Ellison has committed to generating at least $6 billion in synergies post-merger. This operational consolidation is expected to lead to thousands of layoffs across the combined entity. Realizing these cost savings becomes more critical as the company assumes substantial debt at higher interest rates.
The market’s demand for up to 9 percent yields on the debt offering indicates investor appetite for high-yield opportunities but also signals a higher cost of capital for large-scale mergers in 2026. This environment contrasts with periods of lower borrowing costs that facilitated previous media consolidations. The higher interest burden could constrain future investment or profitability, despite the anticipated synergies.
The ongoing regulatory delay presents a key risk factor for the merger. While Paramount has secured its financing, the lack of a definitive closing date from the court introduces a period of extended uncertainty for both companies and their shareholders. The financing structure is in place, but the legal framework remains fluid.
