Skydance Corporation Settles ~$12.6B in Notes Exchange Offers and Issues 470M+ Warrants Following WBD Acquisition

Executive Summary

On October 13, 2026, Skydance Corporation (formerly Paramount Skydance Corporation) filed a Current Report on Form 8-K announcing significant financing transactions and capital structure adjustments following the completion of its merger with Warner Bros. Discovery, Inc. (WBD) on October 6, 2026.

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Key Material Events

1. Warrant Distribution (Item 1.01)

• Issue Date & Mechanics: On October 13, 2026, the company issued 470,746,773 warrants to purchase Class B Common Stock to stockholders of record as of October 5, 2026 (1 warrant per share, excluding designated restricted holders such as Lawrence J. Ellison, David F. Ellison, Gerald J. Cardinale, RedBird Capital Partners Fund IV, company subsidiaries, and retirement trusts).
• Exercise Terms: Initial exercise price is $12.00 per share (subject to anti-dilution adjustments).
• Expiration: October 13, 2036 (10-year term), subject to early expiration after October 13, 2029, if the Class B Common Stock closes at or above $30.00 per share for at least 20 trading days within any 30-day consecutive window.
• Trading: Registered on the NYSE under ticker symbol SKYD WS.

2. Settlement of Debt Exchange Offers (Items 1.01 & 2.03)

• Participation: Approximately 99.15% of the aggregate principal amount of eligible senior notes of Discovery Communications, LLC (DCL) and Discovery Global Holdings, Inc. (DGH) were tendered.
• New Debt Issuance: On October 9, 2026, Skydance issued:
  • $11,983,970,000 aggregate principal amount of USD-denominated Senior Secured Second Lien Notes across 12 tranches maturing between 2029 and 2052, with coupons ranging from 4.875% to 6.350%.
  • €546,547,000 aggregate principal amount of Euro-denominated Senior Secured Second Lien Notes across two tranches (5.802% due 2030 and 5.068% due 2033).
• Collateral & Guarantees: Notes are senior secured second-lien obligations of Skydance Corporation, co-issued by DCL and DGH, and guaranteed by designated subsidiaries.

3. Cash Tender Offers (Items 1.01 & 8.01)

• Repurchase: Skydance completed cash tender offers for two series of existing DCL/DGH senior notes, purchasing $2,395,448,000 in aggregate principal amount for $2,380,201,732.56 in cash plus accrued interest (98.83% acceptance rate).

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Capital Structure & Market Impact

• De-risking & Refinancing: The high participation rate (~99%) effectively terms out legacy Discovery debt into Skydance Corporation obligations, consolidating obligations under a unified second-lien structure.
• Potential Future Dilution: The 470.7M warrants represent potential future common equity issuance upon exercise at $12.00/share, creating eventual dilutive overhang if the stock appreciates above strike, while potentially generating up to ~$5.65 billion in gross cash proceeds if fully settled physically.