June 11 (Reuters) - Credit ratings agency Fitch Ratings

on Wednesday downgraded Warner Bros Discovery ( WBD ) to junk

status following the company's announced split-up earlier this

week, as investors weigh the deal's likely impact on holders of

its debt.

"The downgrade reflects Fitch's expectation

post-transaction, WBD will be smaller and less diversified in a

secularly declining industry and have elevated leverage," Fitch

analysts wrote.

"Depending on the final capital structure, a multi-notch

downgrade is possible," they added.

On Monday, the entertainment conglomerate announced plans to

split into two publicly traded companies: one anchored by its

Warner Bros Pictures, DC Studios, and growing HBO Max streaming

service, while the other will serve as home to its legacy cable

channels, including CNN and TNT.

The split-up, expected to close in mid-2026, aims to help

the current company better handle its immense $37 billion debt

resulting from the 2022 merger of Warner Bros and Discovery.