Just hours after Paramount Skydance's $52 billion high-yield bond issuance, investors were already sitting on hundreds of millions of dollars in paper losses, with asset management institutions angrily calling the Wall Street banks that underwrote the debt.

The junk bonds saw a particularly sharp decline on their first day of trading. The company's 8-year dollar bonds were issued at par on Wednesday but traded at only 95 cents on the dollar on Thursday. Loans and investment-grade bonds also weakened, while securities betting on the company's credit deterioration rose to their highest level in 17 years.

Paramount Skydance's financing was primarily raised to fund its acquisition of Warner Bros. Discovery. When the company communicated with investors about the bond and loan offerings this week, it faced a barrage of questions about the heavy debt burden after the deal closes and its cost-cutting plans. Once early trading began on Thursday, these bonds and loans immediately fell.

This is unusual on Wall Street, as underwriters typically price bonds at levels where investors can make a slight gain, encouraging them to keep buying. The immediate losses following this massive debt issuance are reminiscent of the situation after SpaceX issued $25 billion in bonds in June. In Paramount Skydance's case, because some investors withdrew at the last minute, particularly in the long-term bond portion, some investors unusually received most or even all of the bonds they applied for. People familiar with the matter said this led some asset managers to end up with unexpectedly large positions and seek to quickly reduce their exposure.

People familiar with the matter said selling pressure during early Thursday trading in New York caused debt prices to plunge, with traders expressing dissatisfaction to underwriters Bank of America and Citigroup through text messages and phone calls.

Paramount Skydance's bond issuance had to be executed quickly. The company had just resolved a batch of lawsuits late last month, clearing the final obstacle to its acquisition of Warner Bros. Previously, these lawsuits prevented the company from raising funds earlier, forcing it to pay higher financing costs. Impax Asset Management portfolio manager Tony Trzcinka said: "The timing of the bond issuance was to some extent forced by circumstances. Paramount Skydance is now paying significantly higher interest than it would have earlier this year."

Paramount Skydance Chief Financial Officer Dennis Cinelli said the debt price decline was merely "market fluctuation within a single day. We entered the market not for a one-day trade, but to complete a transformative acquisition and build the next-generation entertainment and technology company."

The investment-grade bonds issued by Paramount Skydance on Wednesday ultimately drew about $80 billion in demand, down from a peak of $109 billion. Orders for long-term bonds lost more than 50%. SpaceX experienced a similar situation in June this year. Bloomberg News analysis shows that paper losses on investment-grade bonds alone exceeded $200 million.

Meanwhile, risk premiums in both the U.S. investment-grade and junk bond markets have risen. Credit default swaps (CDS), an important gauge of market risk, rose to their highest level since March, indicating heightened investor concerns. Trace data shows that the yield on Paramount Skydance's $5.25 billion 10-year investment-grade bond was 2.78 percentage points above the benchmark rate on Thursday, compared with an issuance yield of 2.625 percentage points above U.S. Treasury yields. Spreads on the shortest-maturity bonds widened slightly. The White House declined to comment. Apollo did not immediately respond to a request for comment.