Netflix () refinanced part of a $59 billion bridge loan with cheaper, longer-term debt, strengthening the financial package underpinning its bid for Warner Bros. Discovery.
The streaming giant obtained a revolving credit line of US$5 billion and two term loans with deferred withdrawal of US$10 billion each to refinance part of the bridge line contracted for the offer by Warner Bros., according to a document released on Monday (22). That leaves $34 billion to be unionized.
Netflix reached a deal in early December that values Warner Bros.’ studio and streaming assets. at US$82.7 billion. Paramount Skydance subsequently launched a hostile bid to acquire all of Warner Bros., triggering a bidding war that will reshape the entertainment industry regardless of the winner. The rival bids involve multibillion-dollar debt deals, among the largest in the last decade.
Last week, Warner Bros. recommended to its shareholders that they reject Paramount’s offer in favor of the original deal with Netflix. Warner Bros. called Paramount’s proposal, which includes $54 billion in debt commitments, as “inferior and inadequate,” and said financing the deal was too risky.
While Netflix has the support of the Warner Bros. board, it faces regulatory and political hurdles in completing the acquisition. Democratic Senator Elizabeth Warren of Massachusetts called the offer an “antitrust nightmare,” and Netflix has sought to reassure its employees that the purchase will not result in the closure of studios.
Bridge Loans
Bridge loans are used to cover immediate financing needs and are common in companies preparing purchase offers. They are typically replaced weeks or months later by more permanent and cheaper debt, often spread across multiple creditors.
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Although short-lived, these loans allow banks to build relationships with companies to win more lucrative contracts in the future. With the credit market calmer recently, competition between banks has been intense for the few opportunities available.
Wells Fargo, BNP Paribas and HSBC are among the banks that provided the unsecured bridge loan to Netflix.
The debt announced on Monday matures at staggered intervals. If the acquisition goes forward, the revolving credit line, which allows for flexible borrowing and payments, will expire in 2030 or three years after the deal closes, whichever comes first. Term loans with deferred withdrawal mature in two and three years, respectively, according to the statement.
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Netflix will likely turn to the capital markets to further reduce its bridge line and extend debt terms. When this occurs, the debt should receive an investment grade rating, as Netflix has an A3 rating from Moody’s and an A rating from S&P Global Ratings.
The company used the junk bond market in the early years, but gained access to cheaper financing after being promoted to a blue-chip company in 2023.
© 2025 Bloomberg L.P.
