TREE NEWS reports: Investors in Paramount Skydance’s $52 billion high-yield debt issuance were underwater by hundreds of millions of dollars within hours, with asset managers calling the Wall Street banks that underwrote the debt. The 8-year dollar bond, sold at par on Wednesday, traded Thursday at just 95 cents on the dollar, while the company’s loans and investment-grade bonds also weakened and the cost of insuring its debt against default rose to a 17-year high. Proceeds mainly fund the Warner Bros. Discovery acquisition.
Paramount Skydance High-Yield Bond Buyers Sit on Hundreds of Millions in Paper Losses
The speed of the markdown matters more than the size: a bond priced at par one day and quoted in the mid-90s the next points to a distribution problem, not a change in the issuer's story. That the weakness spread to the loans and investment-grade paper, and that protection costs hit a 17-year high, suggests buyers are repricing the whole capital structure around the Warner Bros. Discovery integration rather than one tranche. The open question is whether the underwriting banks absorb the unsold risk or reprice further to clear it, since that determines whether this stays a Paramount story or becomes a test of high-yield appetite for large acquisition financings.
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