Story perspectives

S&P Downgrades Oracle as Ellison Backstop Ties Risks

By Drooid · Oct 3, 2026, 6:18 PM UTC · How we work

Summary

Story summary

Paramount Skydance Corp. and Oracle Corp. rose to become two of America’s largest corporate borrowers.
Paramount incurred $52 billion of new debt to fund its Warner Bros. acquisition.
The Ellison family pledged $47 billion of equity, with Larry Ellison personally guaranteeing over $40 billion.
Oracle’s long-term debt exceeded $160 billion, prompting S&P to downgrade its rating to BBB-.
Analysts warned the Ellison backstop could tie Paramount and Oracle credits, creating shared default risk.

History

Historical Context

The 1989 leveraged-buyout of RJR Nabisco, orchestrated by Kohlberg Kravis Roberts, created a $31 billion debt load that reshaped Wall Street. Investment banker Michael Milken at Drexel Burnham raised $20 billion of high-yield bonds, while the Federal Reserve’s 1989 interest rate of 9.5 % amplified borrowing costs. Today Paramount’s $52 billion debt for the Warner Bros. purchase and Oracle’s $160 billion liabilities echo that era, with Larry Ellison’s $47 billion equity pledge mirroring Milken’s bond-backed financing. The precedent of intertwined credit risk prompted regulators to tighten syndicated loan oversight, suggesting future rating agencies may scrutinize shared guarantor structures more rigorously.

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Story summary

Paramount Skydance Corp. and Oracle Corp. rose to become two of America’s largest corporate borrowers.
Paramount incurred $52 billion of new debt to fund its Warner Bros. acquisition.
The Ellison family pledged $47 billion of equity, with Larry Ellison personally guaranteeing over $40 billion.
Oracle’s long-term debt exceeded $160 billion, prompting S&P to downgrade its rating to BBB-.
Analysts warned the Ellison backstop could tie Paramount and Oracle credits, creating shared default risk.

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