Europe’s ELFA Warns Warner Bros. Non-Boycott Clauses Are Risky

A European trade association representing credit investors warned that US media company Warner Bros. Discovery Inc.’s latest debt documentation sets a dangerous precedent by limiting the ability of bondholders to act.

The European Leveraged Finance Association said the firm’s so-called non-boycott clauses were a “negative development” and that any attempt to prevent co-operation or lock-up agreements was not “an acceptable norm.”

Warner Bros. is overhauling its liabilities as it splits into a slower-growing cable channel company and a faster-growing streaming and studio firm. As part of the split, Warner Bros. asked bondholders to agree to give up key safeguards, ...