2 hours ago
New owners of EA have already defaulted on $ 1.5 billion of debt In early August, Electronic Arts was transfor
New owners of EA have already defaulted on $ 1.5 billion of debt
In early August, Electronic Arts was transformed into a private company, and its assets were taken over by a group of investors, including the Saudi Arabian State Investment Fund, Silver Lake Management and Affinity Partners.
The deal was worth about $55 billion, and JPMorgan Chase & Co. provided $20 billion in loan financing. The nuance is that all of the debt went to the balance sheet of Electronic Arts, which has to be paid off with the bank.
However, this has created a serious problem: the change in the debt burden will have a negative impact on the publisher's investment rating, and this raises questions for other lenders and holders of EA's previously issued bonds.
In such cases, the rule is that creditors can assume that simply paying off the debt is not enough, and then demand a return of 101 cents for every dollar invested.
It's two tranches totaling $1.5 billion, with a maturity date of 2051.
The company decided to convert the bonds into assets resembling U.S. Treasury securities, allowing it to divide the body of debt and the accrued interest.
In response, creditors accused the company's executives of defaulting on debt and pointed out that a private rating could not replace the public rating of the big three (S&P Global Ratings, Moody's Investors Service and Fitch Ratings).
This is raising questions about the future of the company, while the dispute with the bondholders will go to court.The conflict has been ongoing since early 2026, when Electronic Arts was unable to buy all the bonds in time.
@gm_galactic #game
In early August, Electronic Arts was transformed into a private company, and its assets were taken over by a group of investors, including the Saudi Arabian State Investment Fund, Silver Lake Management and Affinity Partners.
The deal was worth about $55 billion, and JPMorgan Chase & Co. provided $20 billion in loan financing. The nuance is that all of the debt went to the balance sheet of Electronic Arts, which has to be paid off with the bank.
However, this has created a serious problem: the change in the debt burden will have a negative impact on the publisher's investment rating, and this raises questions for other lenders and holders of EA's previously issued bonds.
In such cases, the rule is that creditors can assume that simply paying off the debt is not enough, and then demand a return of 101 cents for every dollar invested.
It's two tranches totaling $1.5 billion, with a maturity date of 2051.
The company decided to convert the bonds into assets resembling U.S. Treasury securities, allowing it to divide the body of debt and the accrued interest.
In response, creditors accused the company's executives of defaulting on debt and pointed out that a private rating could not replace the public rating of the big three (S&P Global Ratings, Moody's Investors Service and Fitch Ratings).
This is raising questions about the future of the company, while the dispute with the bondholders will go to court.The conflict has been ongoing since early 2026, when Electronic Arts was unable to buy all the bonds in time.
@gm_galactic #game
