Paramount Skydance (PSKY), the acquirer of Warner Bros, is issuing $52bn in bonds despite a junk-rated 'BB' status from S&P Global Ratings. The bonds achieve investment-grade 'BBB-' status due to a special first-lien charge and a commitment by the Ellison family, led by Larry Ellison, to deleverage the company. The Ellison family's net worth of $187bn, largely from Oracle Corp, provides significant credit support.
However, credit default swap costs for Paramount debt have risen, indicating perceived higher risk despite the family commitment.
Source: Financial Times Markets · Summarized by HeadlinesBriefing