By Claire Ruckin A cast of thousands. Records smashed. Instant losses and angry phone calls. If the months-long search for debt to fund the audacious takeover of Warner Bros. Discovery Inc. by David Ellison’s Paramount Skydance Corp. were a prestige drama, the past few days would have been the messy season finale.

In just a week, Paramount sold $52 billion of loans and bonds across markets and continents — a tight timeline for any debt deal funding a takeover, let alone one of the largest financings in recent memory. It clears the way for Ellison to close the $110 billion buyout of Warner, and gain control of its stable of films, streaming and gaming businesses, by Oct. 6 after months of delays.

But Paramount’s interest bills are now much higher than if it had issued debt just months earlier, after inflation concerns lifted global borrowing costs. And instant weakness in the debt’s trading prompted complaints from investors who were stuck with hefty paper losses on their new holdings.

The added interest costs — estimated between $250 million to $500 million a year — could also make it harder to run the merged business. The company is already planning to cut an ambitious $6 billion a year from expenses to keep leverage under control. Paramount’s shares sank almost 10% on Thursday as the debt deal was sewn up, and were little changed during midday New York trading the next day.

Dennis Cinelli, Paramount’s chief financial officer, said the merger was a “strategic, long-term investment in the reshaping of the media industry, and investors are looking at it from that standpoint.”The former Uber Technologies Inc. executive drew a comparison with the rocky initial public offering that began the ride-hailing company’s debut as a listed company.

“In a choppy market” for debt, Cinelli said in an interview, “we feel good about where we landed.”This account of Paramount’s debt-market marathon — and then the sprint to the finish line — is based on conversations with multiple people with knowledge of the deal, who asked not to be identified discussing private information.

The journey began in February, when Paramount beat Netflix Inc. in a high-profile bidding war for Warner. Bank of America Corp. and Citigroup Inc., working with Apollo Global Management Inc., provided a $57.5 billion short-term loan, in one of the biggest-ever bridge financings. The two banks later sold chunks of debt to other firms to cut their own risk.

From the outset, the company and its bankers telegraphed they would issue both high-grade and junk bonds to refinance the deal. That unusual playbook made the deal more complex — but offered Paramount access to multiple markets to raise the immense sums it needed.

Citigroup and Bank of America polled likely buyers. From June, they fielded informal orders, helping ensure money would be there when the deal ultimately launched.

Demand was strong, according to some of the people, but the extensive preparation signaled some bankers worried the enthusiasm might not last. Banks were also wary of getting out caught like they were in 2022, when markets seized up and left them with losses on billions of dollars of unsold “hung” loans.

Some investors were concerned about the disappointing track record of debt-laden media mergers, including those involving Warner. In part to win over credit-rating firms, Ellison, Paramount’s chief executive officer, had privately vowed that he and his company were committed to cutting leverage at Paramount, and S&P Global Ratings said he pledged to use family wealth if necessary.

By July, all the pieces were in place for a prospective mega-debt deal — only for lawsuits from US state attorneys general and a writers union to delay the merger. This frustrated some bankers because the bridge lending threatened to curb their ability to underwrite new mergers and acquisitions.

Then came an unexpected surge in government bond yields and widening credit spreads. The banks were somewhat insulated; unlike many junk-rated buyout financings, the bonds and loans had been structured to leave Paramount on the hook, not them, if borrowing costs rose. But they still worried the less favorable conditions would make the deal a harder sell.

The breakthrough came on Sept. 21, when Paramount said it had settled the lawsuits. There were still some hurdles to clear, most notably that SoftBank Group Corp. was staging its own record-breaking $11.1 billion junk bond offering, aided by banks including Citi. The high-yield market, already under some strain, wasn’t seen as deep enough to handle both deals at once.

SoftBank’s borrowing wrapped up on Sept. 23, clearing the way for Paramount to begin the race to the finish line a day later. There was plenty of extra incentive: Paramount had previously agreed to pay late fees of $7 million a day if the acquisition didn’t close by Sept. 30. Bankers had already held calls between the US and Europe to lay out a sell down plan, while salespeople had called accounts to see if old orders still stood.

The months of preparation appeared to pay off, with about 1,000 investors placing orders for the debt, some of the people said. Many buyers were portfolio managers at multi-strategy hedge funds.

Along the way, the mix of debt was shuffled to reduce bonds and increase loans respectively. Paramount also cut borrowing costs by 0.375 percentage points, or 37.5 basis points, during the sale process, saving about $200 million of interest a year, said Cinelli, the company CFO.

While that helped Paramount’s finances, the change caused some investors to pass at the last minute — saddling those who stayed on with more debt than they had expected. Angry phone calls and messages passed from traders to underwriters about the higher-than-usual attrition within the order book as price quotes on the newly issued debt tumbled.

At one point on Thursday their paper losses totaled hundreds of millions of dollars, but the selling pressure began to ease after the initial burst.

When it was over, the company and its bankers viewed the sale and its quick turnaround as an undisputed success for Paramount and its long-term prospects — “the largest single debt pricing for a company in history,” Leon Kalvaria, chairman of the institutional clients group at Citigroup, said in an interview.

Bank of America didn’t immediately respond to a request for comment, Warner deferred to Paramount and Apollo declined to comment.

Paramount will still have to contend with a show-me attitude among analysts such as the team at CreditSights, which cited risks tied to managing the debt load at the giant media company and meeting the targets for cost-cutting and synergies. With all that, it also promised to release 30 movies a year at the combined studios.

“From a big-picture standpoint, this is a massive vote of approval from the debt markets for Paramount’s acquisition,” Kalvaria said.