Fitch downgrades Paramount to ‘BB+’ from ‘BBB-‘

Fitch Ratings downgraded Paramount Skydance Corporation and Paramount Global’s (PSKY) Long-Term Issuer Default Ratings to ‘BB+’ from ‘BBB-‘ and Short-Term IDR to ‘B’ from ‘F3.’ Fitch has also downgraded PSKY’s senior unsecured debt to ‘BB+’ from ‘BBB-‘ with a Recovery Rating of ‘RR4’. Fitch has placed all the ratings on Rating Watch Negative. “The downgrade reflects competitive pressures across the media sector and continued FCF headwinds from significant transformation costs. Fitch believes PSKY’s leverage and FCF may remain outside negative rating sensitivities longer than we anticipated,” Fitch said. The RWN reflects uncertainty related to the proposed acquisition of Warner Bros. Discovery (WBD). Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure. Fitch expects to resolve the RWN once final transaction terms, financing mix, and post-close deleveraging priorities become clearer.