Netflix refinances part of $59 billion loan for Warner Bros. acquisition
Netflix Inc. has refinanced part of a $59 billion bridge loan to support its potential acquisition of Warner Bros. Discovery Inc., according to a filing on Monday.
The streaming company secured a $5 billion revolving credit facility along with two $10 billion delayed-draw term loans, leaving $34 billion of the bridge loan available for syndication, News.Az reports, citing Bloomberg.
The refinancing covers a portion of the facility Netflix initially arranged to fund its Warner Bros. bid.
In early December, Netflix agreed to acquire Warner Bros.’ studio and streaming assets for $82.7 billion. The deal prompted a bidding war after Paramount Skydance Corp. launched a hostile takeover offer. Both bids involve multibillion-dollar debt arrangements among the largest seen in the past decade.
Last week, Warner Bros. advised shareholders to reject Paramount’s offer in favor of Netflix’s agreement. Warner Bros. labeled Paramount’s $54 billion debt-backed bid as “inferior and inadequate” and criticized its financing as overly risky.
While Netflix has backing from Warner Bros.’ board, it faces regulatory and political scrutiny. Democratic Senator Elizabeth Warren of Massachusetts called the acquisition an “anti-monopoly nightmare.” Netflix has reassured its staff that the deal will not result in studio closures.
Banks including Wells Fargo & Co., BNP Paribas SA, and HSBC Holdings Plc provided Netflix with the unsecured bridge loan. Such loans are typically used to fill immediate financing gaps for buyouts and are later replaced with more permanent, lower-cost debt.
Netflix plans to tap capital markets to reduce its bridge facility further and extend debt maturities. The eventual debt is expected to be investment grade, as Netflix carries an A3 rating from Moody’s and an A rating from S&P Global Ratings.
The company, which relied on junk bonds in its early years, gained access to cheaper financing after being upgraded to blue-chip status in 2023.
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