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Electronic Arts faces bondholder challenge over leveraged buyout debt

Creditors are challenging video game publisher Electronic Arts over debt used to finance its private equity buyout.

FTMQ Gaming, written by our newsroom0 views

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Picture: Game Developer

Video game publisher Electronic Arts is facing a dispute with bondholders following its transition from a public company to private equity ownership, Game Developer reported. In August, a consortium made up of Saudi Arabia's Public Investment Fund, Silver Lake, and Affinity Partners completed an acquisition of the publisher. To finance the buyout, the group borrowed $20 billion from JPMorgan in leveraged debt. [1]

Reports from Private Equity News, the Wall Street Journal, and GameDev.net indicate that bondholders are alleging default following the transaction. Game Developer noted that creditors are demanding more cash regarding previously issued bonds following what Private Equity News described as the largest leveraged buyout. [1][2][3][4]

Electronic Arts is an American video game company based in Redwood City, California, that was founded in May 1982 by Trip Hawkins. The publisher relies heavily on live-service games and sports franchises, including EA Sports FC, Madden NFL, The Sims, Battlefield, Apex Legends, and Need for Speed. [6][7]

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In short

  • Electronic Arts was acquired by a private equity consortium including Saudi Arabia's PIF, Silver Lake, and Affinity Partners.
  • The buyout was financed with $20 billion in leveraged debt borrowed from JPMorgan.
  • Bondholders are alleging default and demanding more cash on previously issued debt.

Sources

Every paragraph above points to the numbered items it rests on. Read the originals here.

  1. [1]Electronic Arts' leveraged buyout faces a bondholder battleGame Developer, 10h ago (the report this story comes from)
  2. [2]Electronic Arts bondholders allege default following largest LBOPrivate Equity News, 16h ago
  3. [3]Exclusive | Electronic Arts Bondholders Allege Default Following Largest LBOWSJ, 2d ago
  4. [4]Electronic Arts' leveraged buyout faces a bondholder battleGameDev.net, 10h ago
  5. [5]Electronic Arts' LBO turns into a bondholder showdownmarketscreener.com, 1d ago

Background

  1. [6]Electronic Arts on Wikipedia
  2. [7]Electronic Arts on Grokipedia

Our newsroom writes these reports with the help of software, from the 7 sources listed and nothing else, and checks them against those sources. Facts can still be wrong or move on; the originals are the record. Spotted a mistake? Write to daniel@monsterkong.com.

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