ANALYSIS: The Co-Op Still Shields Lenders Facing Aggressive LMEs

Before Netflix, Inc. and Paramount Skydance Corp. launched their bidding war for Warner Bros. Discovery, Inc., the seller conducted a shrewd transaction that made the buy possible. To lighten its $35.5 billion debt, Warner Bros. repurchased nearly half of its outstanding bonds, allowing a split of the company into two.

The refinancing was bold not only for the five-day window in which noteholders were required to consent, but also for a restriction within the indenture on those holders’ abilities to form cooperation agreements. Suddenly hindered in their ability to abstain from transactions that might dilute their interests, many ...