Netflix’s $59 Billion Loan for Warner Bros. Among Biggest Ever

(Bloomberg) -- Netflix Inc. has lined up $59 cardinal of financing from Wall Street banks to assistance enactment its planned $72 cardinal acquisition of Warner Bros. Discovery Inc., which would marque it 1 of the largest ever loans of its kind.

Wells Fargo & Co., BNP Paribas SA and HSBC Plc are providing the unsecured span loan, according to a connection and filing connected Friday. Wells Fargo’s $29.5 cardinal information of the indebtedness committedness represents the biggest by a azygous slope for an investment-grade span installation astatine a clip erstwhile Wall Street is looking to gain lucrative fees tied to a long-awaited revival successful acquisitions.

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Such loans are a benignant of financing that is typically replaced with much imperishable indebtedness similar firm bonds. The span is expected to beryllium yet replaced with up to $25 cardinal of bonds, which are sold to organization investors, positive $20 cardinal of delayed-draw word loans and a $5 cardinal revolving recognition facility, some of which are typically held by banks.

The bonds would apt beryllium rated concern people since Netflix carries an A3 indebtedness people by Moody’s Ratings and A by S&P Global Ratings. Netflix relied connected the junk-bond marketplace for years successful the aboriginal days of its business, but was upgraded to blue-chip presumption successful 2023, giving the streaming elephantine entree to cheaper financing and a deeper excavation of investors.

A indebtedness of $59 cardinal would fertile among the biggest of its type. Anheuser-Busch InBev SA obtained $75 cardinal of loans to backmost its acquisition of SABMiller Plc successful 2015, the largest span financing connected record, according to information compiled by Bloomberg.

Under the woody announced Friday, Warner Bros. shareholders volition person $27.75 a stock successful currency and banal successful Netflix for an endeavor worth of astir $82.7 billion.

M&A Debt Wave

Both banks and investors person been eagerly awaiting the instrumentality of mega acquisitions successful investment-grade and high-yield rated transactions. In the junk-rated space, JPMorgan Chase & Co. made waves successful September by committing $20 cardinal of financing for the take-private of Electronic Arts Inc., the largest indebtedness committedness ever made by a azygous slope for a leveraged buyout.

Bridge loans are a important measurement for banks successful gathering relationships with companies to triumph higher-paying mandates down the road. One oregon a tiny radical of banks typically supply the archetypal span loan, and past bring successful different banks to dispersed the hazard erstwhile the acquisition is publically announced.