S&P Global Ratings will downgrade Paramount Skydance Corp. by one notch upon the completion of its merger with Warner Bros. Discovery. The agency cited a projected leverage ratio of 7.6x for the newly combined entity. This figure significantly exceeds the 4.25x threshold S&P typically requires for a BB+ rating.
Paramount Skydance launched tender and exchange offers for Warner Bros. Discovery debt on May 19 to finance the acquisition. While the Ellison family committed to aggressive deleveraging, S&P projections for debt levels remain higher than internal company forecasts. The ratings agency also highlighted significant execution risks involved in integrating the two media giants.