Fitch Downgrades Paramount and WBD Bonds to Junk Status Following Merger

Key Facts

1Fitch cut the issuer ratings for the newly merged Skydance and WBD deeper into junk territory at BB.

2Legacy Paramount 6.875% notes due 2036 plunged to a record low of 77.7 cents on the dollar.

3The new $87.5 billion debt structure places unsecured bondholders behind $57 billion of senior secured debt.

Fitch Ratings downgraded the issuer credit ratings of the newly merged Skydance entity and Warner Bros. Discovery (WBD) deeper into junk territory at BB. According to ZeroHedge, the downgrade follows the finalization of a merger that introduced a new $87.5 billion debt structure, placing legacy unsecured bondholders behind $57 billion in senior secured debt. Consequently, legacy Paramount 6.875% notes due 2036 plunged to a record low of 77.7 cents on the dollar.

SKYD closed at $9.53 on October 6, 2026, while WBD closed at $30.95 on October 5, 2026. The credit market reaction highlights the impact of increased leverage and the prioritization of new secured debt over existing unsecured obligations within the combined media conglomerate's capital stack.