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Bond Market News
Paramount Downgraded to BB by Fitch
October 6, 2026
Paramount Skydance was downgraded by a notch to BB from BB+ by Fitch. Paramount’s recently issued first-lien and second-lien notes were assigned BBB- and BB ratings, in-line with the expected ratings published by Fitch on September 28. The downgrade reflects materially higher leverage following WBD acquisition, significant execution and integration risks. Fitch estimates pro forma leverage at 7.8x in FY2026, following the addition of ~$57bn of acquisition-related debt, before declining to 6.2x in FY2027 as merger synergies are realized. Fitch’s base case assumes Paramount captures 85% of more than $6bn in identified cost synergies, against ~$4bn of costs to achieve them. Fitch notes that management’s targets of reducing net leverage below 3.75x in FY2028 may require additional debt reduction through equity issuance or asset sales. The transaction significantly strengthens Paramount’s competitive position by expanding its content portfolio and creating a combined DTC platform with more than 200mn subscribers before overlap. However, these benefits are offset by intense streaming competition, substantial integration complexity and structural pressure on linear television, which accounted for ~86% of EBITDA in FY2025. Adequate liquidity, including a $5bn undrawn revolving facility, provides some support, Fitch added.
Paramount’s recently issued 8.875% 2034s was trading tad lower at 96.3, yielding 9.5%.
– Vandit P
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