Warner Bros. Discovery Inc. (WBD) has taken a significant financial step with the entry into a material definitive agreement involving an $17 billion Non-Investment Grade Leveraged Bridge Loan Agreement. This strategic move, announced on June 26, 2025, aims to finance the early settlement of previously announced cash tender offers and consent solicitations, repay a 364-day senior unsecured term loan, and support general corporate purposes. The bridge loan, with an 18-month term, carries an interest rate starting at SOFR plus 3.00% and increasing to 4.00% by March 2026. It is secured by a lien on substantially all personal property assets of the company and its subsidiaries.
This financial maneuver reflects Warner Bros. Discovery’s ongoing efforts to optimize its capital structure amid a dynamic communications services sector characterized by rapid technological innovation and evolving consumer behavior. The company’s FY 2024 financials show total revenue of approximately \(39.3 billion, with an operating loss of \)10.03 billion, and total liabilities of \(69.6 billion, including long-term debt of \)36.8 billion. The debt-to-equity ratio stands at 0.86, indicating a leveraged but manageable capital structure.
The bridge loan facility is designed to mature either 18 months after funding or upon the completion of a significant corporate transaction involving the distribution of the company’s Streaming & Studios business. This aligns with Warner Bros. Discovery’s strategic focus on streamlining operations and enhancing shareholder value. The loan agreement includes customary covenants restricting mergers, asset sales, additional debt, and dividend payments without lender approval, but notably lacks financial maintenance covenants.
In FY 2024, Warner Bros. Discovery also engaged in notable mergers and acquisitions, including investments in BluTV, Discovery Family, MotorTrend Group LLC joint venture, Scripps Networks Interactive, and WarnerMedia, totaling significant strategic expansions.
This bridge loan agreement and related credit facility amendments underscore Warner Bros. Discovery’s proactive financial management in a sector driven by streaming growth, digital advertising, and technological advancements such as AI and 5G. The company’s ability to navigate economic uncertainties, regulatory challenges, and competitive pressures will be critical in leveraging these financial instruments for future growth.
For context, Warner Bros. Discovery’s previous earnings calls have emphasized the importance of strategic capital allocation, cost management, and investment in content and technology to drive long-term shareholder value. This bridge loan facility provides the financial flexibility to support these priorities while managing liquidity and debt maturities effectively.
Source document: Warner Bros Discovery 8-K Report June 26 2025