Paramount Skydance Corp.'s acquisition of Warner Bros. Discovery Inc. will feature a rare debt structure combining investment-grade and junk-rated bonds, according to Wall Street banks. The $57.5 billion financing package represents one of the largest media mergers in recent years, with lenders tapping multiple debt markets to fund the blockbuster deal.

Investment banks are structuring the financing to appeal to different investor bases, mixing safer investment-grade debt with higher-yielding junk-rated securities. This unusual approach reflects both the scale of the acquisition and the current market appetite for large media deals. The split between investment-grade and junk-rated portions remains unclear, though sources indicate banks are targeting a broad range of institutional investors.

The financing structure highlights Wall Street's confidence in the combined entity's cash flow potential despite the heavy leverage. With interest rates elevated, the deal's success may hinge on the ability to syndicate both tranches efficiently. Market participants are watching closely to see if this mixed-grade approach becomes a template for future mega-mergers in the media sector.