June 16 (Reuters) - Warner Bros Discovery ( WBD )

bondholders overwhelmingly approved a plan to split the

corporation and put in place a new capital structure related to

the deal, the company said Monday.

Bondholders voted to remove restrictions that could have

prevented the company from carrying out its plan to cleave

itself into two publicly traded entertainment companies,

separating its studios and HBO Max streaming service from its

fading cable networks.

Credit investors also supported the company's plan to buy

back nearly half of its $37 billion in debt resulting from the

2022 merger of WarnerMedia and Discovery.

The bondholders had until Friday to approve changes to debt

covenants that would leave the legacy cable business - and its

bondholders - holding the lion's share of debt. The less

indebted streaming and studio business, meanwhile, would have

flexibility to better compete with rivals.

But the details of the split, which analysts told Reuters

were highly complex, left certain bondholders concerned they

could be left empty-handed. They said it would leave some

holding unsecured bonds tied to the declining cable business,

meaning they would lack collateral protection and come second in

priority of payment to the secured bondholders in the event of

bankruptcy.

The law firm Aiken Gump Strauss Hauer & Field failed in its

effort last week to organize bondholders to negotiate better

terms, according to published reports.

Warner Bros Discovery ( WBD ) said the consent solicitation received

support from the majority of all bondholders, with up to 99% of

certain groups voting their support. Credit investors have until

June 23 to tender their bonds.

Credit ratings agencies Fitch and Moody's downgraded Warner

Bros Discovery ( WBD ) to junk status last week, even as investors

weighed the deal's likely impact on holders of its debt. S&P

Global Ratings had downgraded Warner debt to junk status earlier

this month, citing the challenges confronting its cable

networks.

The rating downgrades triggered forced selling by funds with

investment-grade portfolio mandates, according to a person

familiar with the matter. This in turn resulted in net selling

of the company's bonds, the person familiar added.