Paramount needed to secure a massive financing package for its Warner Bros. Discovery deal, with the clock ticking down on a Sept. 30 deadline to close the acquisition without penalty.

When it completed a $52 billion debt sale on Wednesday-the largest ever by a public company in a single-day transaction-finance chief Dennis Cinelli was staring down a rocky market that made it the most expensive day to sell corporate bonds in several years. "Are we paying a little more in interest?" Cinelli said in an interview. "We are. But we'd much rather get the deal done and then manage that accordingly."

Welcome to life in a rising-rate environment. The Federal Reserve just lifted its overnight rate for the first time in three years, and a sharp government bond selloff has pushed the 10-Year Treasury yield near a 24-year high. Yields just posted their steepest quarterly increase since 1994, and rates on everything from mortgages to student loans are moving higher.

Paramount would have saved roughly $400 million in annual interest payments had it sold the debt just a few months ago, when Treasury yields were around a percentage point lower, though it did hedge some of that rate exposure in the derivatives markets, people familiar with the matter said.

The company had been targeting a midyear debt sale before a group of states sued to block the Warner Bros. merger, putting the acquisition in jeopardy. A settlement paved the way for it to move forward-just as yields were jumping.

All things considered, Paramount's sale went smoothly. But it is one of the starkest examples yet of the eye-popping cost to borrow now. Paramount will pay interest as high as 9.1% on a package of investment-grade and junk-rated bonds that mature between 2028 and 2066.

For big corporate borrowers, the credit markets have grown more fraught. Paramount's deal showed the markets can still absorb historically large slices of debt. But wild swings in Treasury yields and a glut of borrowing tied to the artificial intelligence build-out are making it more expensive to borrow-even for top-rated companies like Meta Platforms.

That is despite the fact that the extra interest companies are paying over Treasury yields remains relatively low, indicating that investors feel good about corporate credit risk.

The strongest AI hyperscalers can afford to eat higher rates, but not every industry can say the same. In recent weeks, the equal-weighted S&P 500 index has badly underperformed the regular, market-cap weighted index, which remains near a record. Analysts are chalking that up to rates-related pain in capital-intensive industries outside of the red-hot AI trade. Corporate bond prices fell this week, especially on debt with lower credit ratings.

"The rapid rise in yields and expectations for rate volatility are also starting to weigh" on corporate debt, Barclays analyst Bradley Rogoff wrote to clients on Friday.

For now, money managers are locking in some of the most attractive rates offered by corporate borrowers since the financial crisis of 2008-09. Hundreds of big investment firms, including Apollo Global Management and Pimco, lined up for the Paramount offering, which also included floating-rate loans.

Potential investors placed orders for $150 billion of Paramount debt, a strong showing that nearly tripled the amount offered, said Leon Kalvaria, global chair of banking at Citigroup, which ran the sale alongside Bank of America.

Still, a rocky first day of trading underscored the market's recent unease. One of Paramount's new junk-rated notes changed hands near 96 cents on the dollar, handing investors a steep first-day loss, before regaining some ground on Friday.

"I've been in this a long time," Kalvaria said. "Markets always have choppy days, and you have to take a long-term view. We had great execution in a volatile market and now the company has its long-term capital structure in place."