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Bond Market News
Warner Bros Downgraded to Ba1; Plans to Buyback $14bn Bonds Using Bridge Loan
June 11, 2025
Warner Bros. Discovery Inc (WBD) was downgraded from its investment-grade rating of Baa3 to Ba1 by Moody’s, making it a fallen angel. On 9 June 2025, WBD announced that its streaming and studios business (WBD S&S) will be established into a new publicly traded company. The downgrade reflects WBD’s persistent operating challenges and a change in its financial policies to include secured debt in its capital structure pre and post separation.
After having sold one of the biggest high-grade corporate bonds in 2022, the company has decided to buyback about 40% of its $36bn bonds as part of the separation and will use a $17.5bn bridge loan from JPMorgan Chase to finance the buyback. As per sources, if investors decide to sell their bonds, they must also give up key safeguards on the rest of their WBD securities as well. If they do not, they stand a potential risk of not being repaid if the company falls into trouble.
Warnermedia’s 4.054% 2029s fell by 0.9 points to 91.384, yielding 6.68%.
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