Warner Bros Discovery bondholders approve plan to split the company

By Dawn Chmiegewski and Matt Tracy

(Reuters) -The company said on Monday -The company said on Monday that (Reuters) -WBD bond holders agreed with a overwhelming majority on a plan to divide the company and put a new capital structure related to the deal.

The bond holders vote to remove the restrictions that the company could have been prevented from implementing its plan to cling to itself in two entertainment companies publicly traded, separated its studios and the HBO Max direct broadcast service from dull cable networks.

Credit investors also supported the company’s plan for the process of approximately half of its debt, resulting from the inclusion process and Discovery 2022.

Until Friday, bond holders had approved the changes in debt covenants that would leave the old cable work – and bond holders – carrying the lion’s share of debt. Meanwhile, the lesser broadcasting and studios will be flexible to compete better with competitors.

But the details of the division, which analysts told Reuters very complicated, left some bond holders to worry that they could leave empty -handed. They said that it would leave some unprecedented bonds linked to low cable work, which means that they will lack guarantees and take second place in the priority of payment to the guaranteed bond holders in the event of bankruptcy.

Aiken Gump Strauss Hauer & Field failed in its efforts last week to organize bond holders to negotiate better conditions, according to the published reports.

Warner Bruce Discovery said the approval seam received support from most bond holders, with up to 99 % of the groups whose support votes. Credit investors until June 23 to submit their bonds.

Credit rating agencies inspected Warner Bruce Discovery classifying Warner Bruce into an undesirable position last week, even with investors to form the potential impact of the deal on holders of its debts. S&P Global Ratses has reduced Warner’s debt classification to an undesirable position earlier this month, noting the challenges facing their cable networks.

The classification classification led to forced sale by money with investment portfolio delegations, according to a person familiar with this issue. The familiar person added that this in turn led to a net sale of the company’s bonds.

(Participated in the reports of Dawn Chmiegewski in Los Angeles and Matt Trissy in Washington, DC; edited by Kim Kojil and Crystone Kushing)