Commentary & Deal Flow

+++Adds Investment Grade Tranches below as an FYI+++

Paramount Skydance Corporation (PSKY, PARA) $12.4bn equiv 144A/Reg S sr sec 2nd lien notes 4-part (originally 5-part). B1/BB/BB (stable/stable/stable). Via BofA (B&D) left lead bookrunner, Citi/Apollo jt global coords, DB/WFS/Barc/BNP/GS/Miz/MS/TD jt books, SMBC/TSI/RBC/NWM as sr co-managers, Citizens/PNC/ICBC as co-managers. New York law. 

    - USD sr sec 2nd lien notes due 2031 (5y). NC2 (MWC T+50bp) (50%, 25%, par). Equity claw: 2y 40%. Special call: 10% per year the first 2 years at 103. No reg rights. CoC at 101, if there is a downgrade by 2 out of 3 rating agencies, unless the 2nd lien notes are IG rated by at least 2 out of 3 rating agencies. SMR at 101 if the deal has not closed on or prior to 11-June-2027. Denoms: 2kx1k. IPT: low-mid 8s. Price talk: 8.375% area.

    - USD sr sec 2nd lien notes due 2034 (8y). NC3 (MWC T+50bp) (50%, 25%, par). Equity claw 3y 40%. Special call: 10% per year the first 3 years at 103. No reg rights. CoC at 101, if there is a downgrade by 2 out of 3 rating agencies, unless the 2nd lien notes are IG rated by at least 2 out of 3 rating agencies. SMR at 101 if the deal has not closed on or prior to 11-June-2027. Denoms: 2kx1k. IPT: high 8s. Price talk: 8.875% area.

    - USD sr sec 2nd lien notes due 2036 (10y). NC5 (MWC T+50bp) (50%, 25%, par). Equity claw: 3y 40%. Special call: 10% per year the first 3 years at 103. No reg rights. CoC at 101, if there is a downgrade by 2 out of 3 rating agencies, unless the 2nd lien notes are IG rated by at least 2 out of 3 rating agencies. SMR at 101 if the deal has not closed on or prior to 11-June-2027.s: 2kx1k. IPT: low 9s. Price talk: 9.125% area.

    - EUR sr sec 2nd lien notes due 2031 (5y). NC2 (MWC B+50bp) (50%, 25%, par). Equity claw: 2y 40%. Special call: 10% per year the first 2 years at 103. No reg rights. CoC at 101, if there is a downgrade by 2 out of 3 rating agencies, unless the 2nd lien notes are IG rated by at least 2 out of 3 rating agencies. SMR at 101 if the deal has not closed on or prior to 11-June-2027. Listed on TISE. Denoms: 100kx1k. Whisper: 100bp inside US$ 5y tranche. Price talk: 7.125%-7.375%.

 Dropped: EUR sr sec 2nd lien notes due 2034 (8y). NC3 (MWC T+50bp) (50%, 25%, par). Equity claw: 3y 40%. Special call: 10% per year the first 3 years at 103. No reg rights. CoC at 101, if there is a downgrade by 2 out of 3 rating agencies, unless the 2nd lien notes are IG rated by at least 2 out of 3 rating agencies. SMR at 101 if the deal has not closed on or prior to 11-June-2027. Listed on TISE. Denoms: 100kx1k. Whisper: 100bp inside US$ 8y tranche. This tranche has been eliminated.

Also Investment Grade tranches - Paramount Skydance Corp (PSKY) (Ba1/BBB-/BBB-) US$30bn (down from $32bn) 144A/Reg S 8-part sr secured 1st lien notes. GUIDANCE: 2y T+145#, 3y T+160#, 5y T+200#, 7y T+237.5#, 10y T+262.5#, 20y T+300#, 30y T+315#, 40y T+330#.

Did investor call at 10:30am 09/28. Q&A calls at 12pm 09/28 and 1pm 09/28. Books close 3pm UKT / 10am NYT 09/30. Pricing 09/30 afternoon. UOP: along with $30bn (down from $32bn, $2bn shifted to the term loan B) of sr sec 1st lien IG-rated notes (Ba1/BBB-/BBB-) USD only tranches of 2-, 3-, 5-, 7-, 10-, 20-, 30- and 40-year (all NCL) (which mandated investor calls this morning via BofA/Citi, and will price 09/30), $9.5bn (up from $7.50bn) equivalent (US$8.5bn (up from US$6.5bn)/EUR US$1bn equivalent) sr sec 1st lien term loan B, and $5bn sr sec 1st lien term loan A ($25bn 3y and 2.5bn 5y), which has already been raised, and $2.3bn cash on hand, to fund the acquisition of Warner Bros Discovery Inc (WBD) for $31.00 per share in cash or $81bn total equity ($110bn enterprise value), repay PSKY $1.8bn revolver, repay existing $14.7bn WBD term loans, fund the $2.4bn cash tender offer for existing WBD notes, and repay WBD $3.9bn A/R securitization facility. The deal will also be funded with a $47bn new equity private placement of Class B shares at $16.02 per share by the Ellison Family ($46.720bn) and RedBird Capital Partners ($250m), and others. PSKY equity holders will also be given the opportunity to participate in a rights offering for up to $3.25bn PSKY Class B Common shares at $16.02 per share. BofA/Citi/Apollo originally provided a $54bn debt commitment ($38.6m new bridge loan and a new $15bn bridge loan replacing the existing WBD debt refi bridge loan incurred 06/30/25, to fund the $14.5bn cash cap tender offer across six different bond pools covering all of its approx $35.5bn of outstanding bonds ($17.7bn face amount of bonds were retired)), also a $3.5bn bridge loan to backstop PSKY's existing revolver, which has now been replaced by a new $5bn revolver.  $12.8bn of 2nd lien sr sec notes will also be issued in the exchange offer for a portion of the existing Warner Bros Discovery debt. The debt financing also includes $14.6bn rolled PSKY global unsecured note, $2.6bn rolled WBD unsecured notes and $700m rolled financing leases. The previous plan to spin off WBD's Global network business that was announced 06/09/2025 was canceled. Biz: The combination between Paramount, a global media and entertainment company, with Warner Bros. Discovery, will create a substantial and diversified media leader with best-in-class film and television studios, streaming and linear platforms and an exceptional intellectual property portfolio. HQ: New York, NY.  (Acquisition offer was accepted 02/26/2026). 

Net Roadshow GIC Link: https://www.netroadshow.com/events/login/1PeTHmohCh3Bsvq2oS64mIKJqyCauLGDqpHpI. Entry code: 575726.

Slides Only: www.netroadshow.com. Entry code: WARRIOR26.

Q&A Call #1 Link (Monday, 28 September at 5:00 PM UKT / 12:00 PM ET): https://www.netroadshow.com/events/login/1PeTHmojAK8H9LengdkuSo44pbQqZfHnv2I3E

Q&A Call #2 Link: (Monday, 28 September at 6:00 PM UKT / 1:00 PM ET): https://www.netroadshow.com/events/login/1PeTHmoj9vryxdYcaLNxQrbAu2suOEBaP9gSv