
With Paramount Skydance ("Paramount") successfully obtaining the acquisition agreement from Warner Bros. Discovery ("WBD"), the transaction is expected to close within a year. Against this backdrop, WBD announced that in May 2026, that they solicited consent for deed amendments to nine USD bonds issued by its two issuers, Discovery Communications, LLC (DCL) and seven USD and EUR bonds issued by Discovery Global Holdings, Inc. (DGH, formerly WarnerMedia), involving approximately USD16.5 billion and EUR 700 million, respectively.
Background information: WBD originally planned to convert existing bonds into new ones
As early as June 2025, WBD had added a Required Exchange Transaction mechanism to all its senior unsecured bonds in response to potential acquisition plans. This mechanism arranges WBD to convert the bonds into Junior Lien Exchange Notes by December 30, 2026, in exchange for creditors agreeing to remove protective clauses such as restrictive liens and meet capital structure requirements of Paramount's offer.
The main amendments agreed upon the Consent Solicitation
This consent solicitation for core amendments to existing bonds includes but is not limited to:
1. The activation period for Required Exchange Transactions has been extended from December 30, 2026, to March 4, 2027
- Under the existing bond terms, WBD must make an exchange offer for the bonds before this specified date, swapping them for Junior Lien Exchange Notes; otherwise, it must pay bondholders an additional amount equivalent to 10% of the principal.
- The main changes include cancellation of par-for-par offer exchange requirements, removal of certain restricted debt repayment terms, and the use of subordinated lien exchange notes against pledged assets (mainly due to Paramount borrowing during its acquisition of WBD, which includes most of Paramount and WBD's assets). The order of claims drops below other secured debts, including the Second Lien Exchange Notes mentioned below.
- Following the successful completion of the acquisition, Paramount's latest debt sequencing structure is: First Lien> Second Lien> Junior Lien> Subordinated Bonds
Paramount's exchange offer in Consent Solicitation
To attract creditors to agree to the covenant amendment, WBD proposed that eligible consentees would be eligible to participate in Paramount's concurrent exchange offer. The exchange offer allows existing unsecured WBD bonds to be exchanged for Paramount's second lien notes. In other words, under the new capital structure, the bond issuer will change from WBD to Paramount, and the bond seniority will be upgraded.
If bondholders agree to the deed amendment, they will receive USD/EUR 2.50 in cash (about 25 basis points) for every USD/EUR 1,000 principal.
Summary
In summary, WBD's purpose in this contract amendment is to weaken the mandatory swap transaction commitments made in June 2025, simplify the capital structure, and reduce future refinancing risks. The following table summarizes the impact of creditors agreeing to or refusing consent solicitation:
Agree | Refuse | |
Consent fee | If the deed amendment is approved, investors can receive a consent fee of approximately 25 basis points | If the contract amendment is passed due to meeting the threshold, investors will not receive a consent fee |
WBD Bond Offer Eligibility | Eligible to participate in cash offers (applicable to 2027 and 2028 bonds) or swap offers (applicable to bonds from 2029 to 2052) | Cannot participate in Paramount's cash offer or exchange offer, but WBD's Required Exchange Transaction is allowed |
Changes in bond issuers | The new bonds will be issued and guaranteed by Paramount | It will continue to be distributed by WBD (to be renamed DCL/DGH, a Paramount subsidiary) |
Changes in bond seniority |
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Bond value changes | Bonds are exchangeable at equivalent value without discount risk | If bondholders participate in the Required Exchange Transactions, existing bonds may be replaced with more discounted bonds |
Can the transfer or sale be allowed during the consent solicitation period? | Non-transferable or non-sale (transferable or sold only after the consent solicitation is completed) | Maintain transferable or saleable status |
Data source: WBD, iFAST compilations Data as of 19 May 2026 | ||
