Paramount Skydance Corp. is headed for a one-notch credit downgrade at the close of its merger with Warner Bros. Discovery, and S&P Global Ratings says the combined company has a long road back thanks to an enormous debt load.
S&P affirmed its BB+ issuer credit rating on Paramount Skydance on Tuesday but kept the rating on CreditWatch negative. The agency also assigned preliminary BB issue-level ratings with a recovery rating of 4 to the company’s proposed second-lien secured notes, being offered in exchange for Warner Bros. Discovery junior-lien notes as part of the deal’s capital structure.
