Paramount Jumbo Bond Sale Adds to Pressure on Treasurys

Dow Jones
Sep 30

Paramount Skydance is working to issue $32 billion of investment-grade bonds to help fund its acquisition of Warner Bros., a huge slug of debt that investors said was contributing to weakness in longer-term U.S. Treasurys.

The bonds will likely be sold on Wednesday, two investors said. If completed, the sale would be the fifth largest corporate bond sale on record, according to PitchBook LCD. The investment-grade bonds are just one part of the acquisition financing, with Paramount also looking to borrow more than $12 billion in speculative-grade bonds and more in loans.

Large corporate bond sales can sometimes weigh on appetite for Treasurys, as investors make room in their portfolios for the new debt.

Treasury yields, which rise when bond prices fall, were already being driven higher by escalating bets that the Federal Reserve will keep raising interest rates to fight inflation. The yield on the 10-year Treasury note was recently 5.274%, nearing a 24-year high.

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