JPMorgan-Led Banks Market $5.75B Loan for Electronic Arts Buyout Deal

A group of banks headed by JPMorgan began offering investors a massive $5.75 billion loan package to help fund the leveraged buyout of video game giant Electronic Arts. The financing supports EA's $55 billion privatization deal involving Saudi Arabia's Public Investment Fund and other major investors.

A consortium of banks spearheaded by JPMorgan started pitching a massive $5.75 billion loan package to investors on Monday to support the leveraged acquisition of video game company Electronic Arts, based on documentation obtained by Reuters.

The financing package features a seven-year term loan B structure split between $4 billion in U.S. dollars and 1.531 billion euros (equivalent to $1.75 billion), as detailed in the term sheet. This loan will support EA’s enormous $55 billion privatization transaction led by an investment group that includes Saudi Arabia’s Public Investment Fund, Silver Lake, and Affinity Partners.

Additional financing components include a $3.25 billion term loan A facility plus $9 billion in various dollar and euro-based secured and unsecured debt instruments, the documentation shows.

The privatization transaction is scheduled to finalize in June, based on the companies’ September announcement.

Financial institutions are offering both the $4 billion U.S. dollar segment and the 1.531 billion euro component of the term loan B at a reduced price of 98.5 cents per dollar, with variable interest rates ranging from 350 to 375 basis points above the Secured Overnight Financing Rate (SOFR) and Euro Interbank Offered Rate (Euribor) respectively, according to the term sheet.

Investors have until market close on March 23 to participate in the loan offering, the documentation indicates.

Electronic Arts has not yet provided a response to requests for comment regarding the financing.