The streaming giant has refinanced part of a massive $59 billion bridge loan it secured to support its potential acquisition of Warner Bros.’ studio and streaming businesses. According to a regulatory filing, Netflix lined up a $5 billion revolving credit facility along with two delayed-draw term loans worth $10 billion each. That move reduces the remaining bridge loan to about $34 billion, which will now be syndicated to other lenders.
The refinancing comes after Netflix struck a deal in early December that values Warner Bros.’ studio and streaming assets at $82.7 billion. What initially looked like a straightforward agreement quickly turned into a high-stakes showdown when Paramount Skydance launched a hostile takeover bid of its own. The competing offers have triggered a bidding war involving tens of billions of dollars in debt, making it one of the largest and most consequential deal battles the media industry has seen in years.
Warner Bros.’ board has already made its preference clear. Last week, the company urged shareholders to reject Paramount’s offer and stick with the Netflix deal. Executives described Paramount’s bid for the entire company — which includes $54 billion in debt commitments — as inferior and overly risky, raising concerns about whether its financing would hold up.
Even with board support, Netflix’s path to closing the deal is far from smooth. Regulators and politicians are paying close attention. Senator Elizabeth Warren has publicly criticized the bid, calling it an “anti-monopoly nightmare,” and warning that it could further concentrate power in the hands of a few media giants. Internally, Netflix has tried to calm nerves, telling employees that the acquisition would not lead to widespread studio closures.
Several major global banks, including Wells Fargo, BNP Paribas, and HSBC, are backing Netflix with the unsecured bridge loan. Bridge financing is commonly used in large takeover bids to cover immediate funding needs, with the expectation that it will later be replaced by longer-term, cheaper debt.
That is exactly what Netflix plans to do next. The company intends to tap capital markets to further shrink the bridge loan and push out its debt maturities. Any new debt is expected to be investment grade, reflecting Netflix’s strong credit profile. The company is currently rated A3 by Moody’s and A by S&P Global, a far cry from its earlier days when it relied heavily on high-yield, or “junk,” bonds.
Netflix’s rise to blue-chip status in 2023 opened the door to much cheaper borrowing, and it is now using that financial strength to chase one of the biggest media deals of the decade. Whether regulators, politicians, and shareholders ultimately sign off remains uncertain, but one thing is clear: no matter who wins, this battle will leave a lasting mark on the global entertainment business.
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