NEW YORK (CNNMoney.com) - Time Warner reportedly will see its debt rise to a record for the company in order to pay for the $20 billion share buyback it agreed to in order to satisfy shareholder Carl Icahn.

The Wall Street Journal reports that the world's leading media conglomerate will see its debt level reach about $35 billion. The company agreed to raise its share buyback from its earlier target of $12.5 billion as part of an agreement with Icahn, who had led an investment group that planned a proxy fight for control of the company as part of its proposal to break it into four separate companies.

Time Warner CEO Richard Parsons, left, agreed to have company debt rise to $35 billion in order to make the share buyback demanded by investor Carl Icahn, right, according to a published report.

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The Journal reports that the new debt level should not endanger Time Warner's investment-grade debt rating. It will raise its interest expense, which fell to $1.3 billion in 2005 from $1.5 billion the year earlier.

Company officials told the newspaper the new debt level would be close to the company's target of debt three times its earnings before depreciation and amortization. The company forecast earlier this month was for adjusted operating income before depreciation and amortization of just more than $11 billion.

They also said that the new ratio of debt to earnings would be below earlier multiples.

When chairman and CEO Richard Parsons assumed control of the company in 2002, his primary goal was to reduce debt, a goal he achieved through a combination of improved cash flow and asset sales. The company saw net debt, or debt less cash and cash equivalent, fall to $16.1 billion at the end of 2005 from $25.6 billion at the end of 2002. He set a goal in early 2003 to have debt not exceed 2.75 times operating income before depreciation and amortization.

The new debt level shows the pressure on Parsons and the company to satisfy Icahn and other shareholders about the company's lagging share price. Shares of Time Warner increased 1.6 percent to $18.07 in after-hours trading Friday following the announcement of the agreement with Icahn, although that is still down almost 5 percent from the 52-week high of $19 a share reached in September.

Even without increasing the size of the share buyback, Time Warner had planned to take on additional debt this year to complete its acquisition of cable assets from bankrupt Adelphia Communications Corp. The purchase should help lift the company's operating earnings.

Company executives told the newspaper that they don't see a need to sell any major assets they weren't already planning to sell. The company had previously announced it was looking at selling the Atlanta Braves baseball team as well as the Turner South regional cable channel that carries many of the team's games. The two could fetch a combined $700 million, according to the newspaper. A couple of weeks ago, the company agreed to sell its book-publishing arm for $537.5 million.

But the increased debt could limit company options to make future acquisitions, according to the newspaper.

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For more on the agreement between Icahn and Time Warner, click here.