Paramount Skydance has completed a series of transactions to restructure the debt financing for its proposed $111 billion acquisition of Warner Bros. Discovery.
In an SEC filing, Paramount said it had reached a deal to syndicate its previously disclosed debt funding for the WBD deal and “has entered into permanent financing transactions that will support the consummation of the merger and make up a portion of the post-closing capital structure of the combined business.”
The debt deals will reduce Paramount’s aggregate long-term debt commitments from $54 billion to $49 billion. In addition, Paramount’s previously disclosed commitments for a $3.50 billion revolving credit facility have been reduced to zero. The company also amended its existing senior unsecured revolving credit facility to increase committed liquidity from $3.5 billion to $5 billion in advance of the closing of the merger.
Paramount’s proposed WBD deal is pending regulatory clearance as well as approval by Warner Bros. Discovery shareholders (set to go to a vote at a special meeting on April 23).
In a statement, Andy Gordon, Paramount’s chief strategy officer and COO, called the debt deals “another important milestone towards out completion of our acquisition of Warner Bros. Discovery.”
“This progress follows closely on the heels of our equity syndication, which diversifies our shareholder base and yields potential for strategic and commercial opportunities,” Gordon said.
That’s a reference to Paramount’s announcement that it has brought on the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi, as well as LionTree Investment Fund, as equity investors in connection with the WBD takeover bid. In aggregate, the three Middle Eastern funds are investing close to $24 billion, with Saudi Arabia’s Public Investment Fund taking a roughly $10 billion stake.
Gordon continued, “The strong demand for both our equity and debt offerings underscores confidence in our vision and ability to deliver greater value by bringing together these two storied companies — creating a leading media and entertainment company that strengthens competition, better serves the creative community and delivers even more compelling stories to audiences.”
Through the deals, Paramount syndicated the bridge loan commitments to reduce Citi, BofA and Apollo’s exposure and spread the total amount across 18 banks. In connection with that, the company entered into permanent financing that will sit in the combined Paramount-WBD’s capital structure; that includes a $5 billion Term Loan A and a $5 billion new revolver.
Per the filing, on April 7, Paramount entered into a credit agreement with Citibank as administrative agent and collateral agent; BofA Securities, Citibank, Apollo Global Funding, Deutsche Bank Securities and Wells Fargo Securities as joint lead arrangers and joint bookrunners; Bank of America as syndication agent; Apollo Global Funding, Deutsche Bank New York Branch and Wells Fargo Bank as documentation agents; and “the lenders party thereto.”
Also in the 8-K filing with the SEC, Paramount disclosed that Jeff Shell, who stepped down as president and a board member on April 8, is eligible to receive at least $5 million in severance with his departure.
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