Angry Bondholders Flood Wall Street With Complaints on Paramount Losses

Live updates

1. 1d ago

   Bondholders Protest as Paramount Skydance Debt Prices Crater

   Investors are flooding Wall Street banks with complaints after Paramount Skydance Corp. issued 52 billion dollars in debt to fund a massive Hollywood buyout. The bonds fell in price during their first trading day, pushing yields over 10 percent. Money managers report losses exceeding 100 million dollars, leading to a flurry of angry calls to the underwriters. The debt sale included 30 billion dollars in investment-grade debt, 12.4 billion dollars in junk bonds, and 9.46 billion dollars in loans.

   Why it matters

   The borrowing was intended to fund a leveraged buyout of Paramount, linked to billionaire Larry Ellison. High bond yields are currently squeezing corporate America, making this timing particularly costly for the company. The scale of the debt adds pressure to the U.S. Treasury market.

   What is confirmed

   • Paramount Skydance Corp. issued 52 billion dollars of debt to fund a buyout.
   • The debt sale consisted of 30 billion dollars in investment-grade debt, 12.4 billion dollars in junk bonds, and 9.46 billion dollars in loans.
   • Paramount bonds yielded over 10 percent after new debt prices fell.
   • Bond prices dropped during the first day of trading following the debt sale.

   Still unconfirmed

   • Investors suffered more than 100 million dollars in losses hours after the debt issuance.
   • Paramount intended to raise 42.4 billion dollars from bond offerings for a Warner Bros. deal.
   • The funding was for a 110 billion dollar leveraged buyout.

   What to watch next

   • Further price movements of the 12.4 billion dollars in junk bonds
   • Official statements from the underwriter banks regarding investor losses
   • Credit rating updates for Paramount Skydance Corp.
   Sources used for this update (19)

   1. Yahoo Finance — Market Chatter: Paramount Set to Raise $42.4 Billion From Bond Offerings for Warner Bros. Deal
   2. MarketWatch — Paramount’s mega debt sale reveals how higher bond yields are squeezing corporate America
   3. Financial Times — Paramount stumps up high borrowing costs to fund Warner Bros deal
   4. Barron's — Paramount Bonds Yield 9% Ahead of Massive Debt Sale. Is It Time to Buy?
   5. Bloomberg.com — Angry Bondholders Flood Wall Street With Complaints on Paramount Losses
   6. WSJ — Paramount Jumbo Bond Sale Adds to Pressure on Treasurys
   7. Financial Times — Paramount picked a bad time to fund a $110bn leveraged buyout
   8. Barron's — Paramount Bonds Yield Over 10% After New Debt Falls In Price
   9. Bloomberg.com — Paramount’s $52 Billion Debt Saga Ends With Hair-Raising Finale
   10. Financial Times — The Ellison credit complex gets a bit more complex
   11. Yahoo Finance — Paramount’s Record Bond Sale Has a Rough Opening Day
   12. qz.com — Paramount Skydance bonds fall on first trading day after debt sale
   confidence 90%