Warner Bros. Discovery said Tuesday that a lender group led by JPMorgan Chase & Co. has expanded a bridge loan offering for a second consecutive time, lifting the dollar component from roughly $10 billion to an expected range of $12.5 billion to $13.75 billion. The euro tranche, initially sized at €1 billion (equal to $1.16 billion), may be increased to €2 billion as part of the same financing package.
The company is pursuing the larger loan to replace approximately $15 billion of short-term financing ahead of its planned takeover by Paramount Skydance Corp. The most recent upsizing follows an earlier increase last week, which was attributed to strong demand for the debt. With the second increase, Warner Bros. Discovery aims to cover the entirety of the bridge loan it currently has in place.
Investors are being offered the new loans at a discount of 99 cents on the dollar, presenting an opportunity to profit if the takeover completes - loans are commonly repaid at par when control of a business changes hands. Commitments for both the dollar and euro tranches are due on Wednesday, the company said.
The bridge loan expansion is part of broader debt preparations tied to the proposed $110 billion consolidation of two major Hollywood media companies. Bank of America Corp. and Citigroup Inc. are arranging a larger debt sale estimated at about $50 billion to help fund the acquisition. That package may include roughly $30 billion of investment-grade bonds, about $12 billion of high-yield bonds, and $7.5 billion of loans, and it could be marketed to investors within the next couple of weeks.
Warner Bros. Discovery's actions reflect an effort to secure longer-term funding and replace short-term borrowings prior to the scheduled change in ownership. The expanded loan structure increases the proportion of short-term debt that would be refinanced by the new facility, effectively covering the bridge financing in full if demand holds through the commitment date.
Market participants and lenders will watch the commitment deadline closely, as the success of the loan sale will influence how the company transitions its financing ahead of the planned acquisition. The upcoming larger debt offering tied to the takeover is significant in size and composition, spanning multiple categories of fixed-income products.
Context and next steps
With commitments due imminently, the immediate focus is whether investor appetite remains strong enough to support the enlarged dollar tranche and the potential increase in the euro tranche to €2 billion. Separately, the planned $50 billion debt package intended to back the acquisition will determine the longer-term capital structure associated with the transaction.