Fitch Downgrades Skydance Corp. to BB After Warner Bros. Discovery Deal
Fitch cut Skydance Corp.'s long-term issuer default rating from BB+ to BB, citing higher leverage and integration risks as the merged company carries about $80 billion in debt.
Fitch Ratings downgraded Skydance Corp.'s long-term issuer default ratings from BB+ to BB, according to Variety. The downgrade was issued one day before the Paramount-Warner Bros. Discovery deal officially closed.
With the merger complete, the unified company was renamed Skydance Corp., and its common stock began trading on the New York Stock Exchange. The company opened for business with around $80 billion in debt.
Fitch cited materially higher leverage after the acquisition, significant execution and integration risks, and uncertainty about stated synergies as reasons for the downgrade.
Earlier assessments
In a Sept. 29 note, Moody's rated Skydance's debt overall at Ba3, one notch below investment grade. On Oct. 2, S&P Global gave Skydance slightly higher ratings that were, at the time, in line with Fitch's insights. S&P Global and others calculate Skydance in 2026 and 2027 as having a net-debt-to-adjusted-earnings ratio of 7, with a goal to bring that down to 3x or less by 2029.
Quick answers
What did Fitch Ratings do to Skydance Corp.?
Fitch downgraded Skydance Corp.'s long-term issuer default ratings from BB+ to BB.
Why did Fitch downgrade Skydance Corp.?
Fitch cited materially higher leverage after the acquisition, significant execution and integration risks, and uncertainty about stated synergies.
How much debt does Skydance Corp. have?
Skydance opened for business with around $80 billion in debt.