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TIP509: Value Analysis of Warner Brothers Discovery, Lithia Motors and Meta w/ Bill Nygren & Alex Fitch
We Study Billionaires - The Investor’s Podcast Network
Is Warner's Debt at a Discounted Par a Good Idea?
The company started off with around $43 billion of debt and while it seems highly likely that they can afford this and easily afford the interest ratio is a little over three. Does the higher interest rate environment affect this debt in any way if interest rates were to keep increasing? Are these fixed rate loans that they'll be able to afford for a long time to come? Yeah. It's actually an asset I mean to some extent that you have this debt with very long term at very low rates. And so that liability is actually worth less than what it's marked that on the balance sheet. You know Warner is generating quite a bit of free cash flow. This should generate north of $2 billion
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