"Netflix Inc. has lined up $59 billion of financing from Wall Street banks to help support its planned $72 billion acquisition of Warner Bros. Discovery Inc., which would make it one of the largest ever loans of its kind. Wells Fargo & Co., BNP Paribas SA and HSBC Plc are providing the unsecured bridge loan, according to a statement and filing on Friday."
"Such loans are a type of financing that is typically replaced with more permanent debt like corporate bonds. In this case, those bonds are expected to be rated investment grade since Netflix carries an A3 debt grade by Moody's Ratings and A by S&P Global Ratings. Netflix relied on the junk-bond market for years in the early days of its business, but was upgraded to blue-chip status in 2023, giving the streaming giant access to cheaper financing and a deeper pool of investors."
Netflix obtained $59 billion of unsecured bridge financing from Wells Fargo, BNP Paribas and HSBC to support a planned $72 billion takeover of Warner Bros. Discovery. The bridge loan is expected to be replaced by investment-grade corporate bonds given Netflix's A3 rating from Moody's and A from S&P. The company moved from relying on junk bonds to blue-chip status in 2023, gaining cheaper financing and broader investor access. The $59 billion facility ranks among the largest bridge loans, with Anheuser-Busch InBev's $75 billion for SABMiller remaining the record. Warner Bros. shareholders will receive $27.75 per share in cash and Netflix stock for an enterprise value near $82.7 billion. Banks view large bridge loans as a route to win future higher-paying mandates and typically syndicate risk after public announcement.
Read at www.mercurynews.com
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