Warner Bros. Discovery, Inc. 8-K

What Happened Warner Bros. Discovery, through subsidiary Discovery Global Holdings, Inc., announced it entered into a First Lien Credit Agreement on June 4, 2026 and borrowed seven‑year term loans: $13,000 million (USD) and €1,717 million (EUR). The company used the net proceeds, together with cash on the balance sheet, to repay in full $15,000 million of outstanding loans under its Non‑Investment Grade Leveraged Bridge Loan Agreement (originally dated June 26, 2025).

Key Details

• Loan amounts and maturity: $13.0B USD term loans and €1.717B Euro term loans, maturing June 4, 2033 (7 years).
• Interest and amortization: USD loans bear interest at Term SOFR + 2.50% or Base Rate + 1.50% (at borrower’s option) and amortize 1.00% per year (quarterly); Euro loans bear interest at EURIBOR + 2.50%.
• Security and guarantees: Obligations are first‑lien secured on substantially all assets of WBD, DGH and certain domestic subsidiaries (pari passu with the company’s existing revolver) and are guaranteed by WBD and certain domestic subsidiaries.
• Covenants and defaults: Agreement contains customary affirmative and negative covenants (limits on M&A, liens, dividends, affiliate transactions, etc.), customary prepayment provisions, no financial maintenance covenant, and acceleration rights upon events such as a change of control (e.g., the previously disclosed proposed Paramount Skydance acquisition).

Why It Matters This transaction replaces a short‑term bridge facility with longer‑dated, secured term debt, locking in financing through mid‑2033 and providing time to execute strategic plans. The security and covenants affect creditor priority and operational flexibility (restrictions on certain transactions and payments), while the lack of a financial maintenance covenant means there is no routine covenant test tied to leverage or interest coverage. Investors should note the interest rate structure and amortization schedule, and that certain corporate events (including a change of control) could trigger immediate repayment.