{"id":638389,"date":"2026-10-06T20:34:13","date_gmt":"2026-10-06T20:34:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/638389\/"},"modified":"2026-10-06T20:34:13","modified_gmt":"2026-10-06T20:34:13","slug":"skydance-credit-rating-downgraded-on-debt","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/638389\/","title":{"rendered":"Skydance Credit Rating Downgraded on Debt"},"content":{"rendered":"

\n\tThe new Skydance<\/a>\u2018s ability to repay its massive debt following the megamerger of Paramount and Warner Bros. Discovery is being called into question by credit rating agency Fitch.<\/p>\n

\n\tLed by CEO David Ellison, Skydance opened for business<\/a> Tuesday with a nearly unprecedented level of debt for a large media M&A transaction at around $80 billion<\/a>. By comparison, when Discovery Communications bought WarnerMedia from AT&T, it assumed $43 billion of AT&T\u2019s debt, leaving the new WBD with about $53 billion in gross debt as of June 2022.<\/p>\n

\n\tPer a note issued by Fitch Ratings on Monday \u2014 one day before the Paramount-Warner Bros. deal officially closed and the common stock of the unified company, renamed Skydance Corp., began trading on the New York Stock Exchange \u2014 the ratings firm downgraded Paramount Skydance\u2019s long-term issuer default ratings (IDRs) from BB+ to BB as a result of the merger.<\/p>\n

\n\tThe Fitch BB+ rating is the firm\u2019s highest non-investment grade rating (so Paramount\u2019s debt already carried a a high-yield or \u201cjunk\u201d rating), and BB reduces that one level. The rating downgrade means Fitch sees Skydance as having \u201celevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.\u201d But with the rating level, Fitch still notes there is enough flexibility to allow for debt repayment.<\/p>\n

\n\tPer Fitch, the \u201cdowngrade reflects materially higher leverage after the acquisition and significant execution and integration risks\u201d as well as \u201cuncertainty about the company\u2019s ability to achieve its stated synergies, which are material to its deleveraging target.\u201d The firm says the newly merger entity \u201cfaces structural pressure on linear revenues, streaming competition and hit-driven content risk.\u201d<\/p>\n

\n\tThe other two major credit rating firms, Moody\u2019s and S&P Global Ratings, have not yet issued new evaluations of the combined company\u2019s financial outlook since making predictions last week.<\/a><\/p>\n

\n\tIn a Sept. 29 note, Moody\u2019s rated Skydance\u2019s debt overall at Ba3, which is one notch below investment grade. That investment rating means the company pays higher interest rates in most cases for the credit facilities and short-term borrowings that are a normal course of business for large enterprises.<\/p>\n

\n\tOn Oct. 2, S&P Global gave Skydance slightly higher ratings, which at the time were in line with Fitch\u2019s insights. S&P Global and others calculate Skydance in 2026 and 2027 as having a net-debt-to-adjusted-earnings ratio of 7. The goal would be to bring that down to 3x or less by 2029.<\/p>\n","protected":false},"excerpt":{"rendered":"The new Skydance\u2018s ability to repay its massive debt following the megamerger of Paramount and Warner Bros. Discovery…\n","protected":false},"author":2,"featured_media":638390,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,46,4527],"class_list":["post-638389","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-il","tag-israel","tag-skydance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/638389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=638389"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/638389\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/638390"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=638389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=638389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=638389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}