Paramount and Skydance Corp.'s $41 billion of US dollar bonds to finance its takeover of Warner Bros. Discovery Inc. sold off to start their first full day of trading Thursday. The cost of protecting the company's debt against default for five years rose as much as 53 basis points to 432 basis points, the highest level since April 2009.
Paramount raised $52 billion from bonds and loans in one of the largest buyout fundings on record, locking in high long-term financing costs. A $5.25 billion 10-year investment-grade note traded at a spread of 2.72 percentage points above the benchmark rate. The eight-year high-yield security declined below 95 cents on the dollar.
The company raked up about $80 billion of demand for the high-grade notes sold, down from peak demand of $109 billion, with investor orders dropping after interest rates on the notes were lowered. The weaker trading levels on the Paramount bonds stood out as the broader market was just a touch wider. Credit default swaps, a key barometer of market risk, were little changed.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing