A consortium of banks led by JPMorgan Chase is simultaneously shepherding two large leveraged finance transactions that bankers say will serve as a barometer of investor demand in a volatile technology market.
The banking group has launched the sale of a $5.75 billion cross-border loan to help fund the leveraged buyout of video game publisher Electronic Arts (EA). That syndication kicked off on Monday and has been scheduled with the aim of completing the loan by the close of business on March 23, according to people familiar with the matter. The same lead banker - JPMorgan - plans to move quickly into price discovery for a separate debt package tied to software firm Qualtrics' purchase of rival Press Ganey Forsta after concluding the EA sale.
The EA acquisition, announced in September, involves a consortium of buyers that includes Saudi Arabia's Public Investment Fund, Silver Lake and Affinity Partners. The deal is a record $55 billion leveraged buyout that is expected to close in June. Financing for the transaction includes a seven-year term loan B, a $3.25 billion term loan A and roughly $9 billion of additional secured and unsecured debt issued in dollar and euro markets.
Investor interest in the EA offering has been substantial during the primary market launch, with the package attracting more than $19 billion of demand since Monday, one of the people familiar said. Both EA and Qualtrics did not immediately reply to requests for comment, according to the sources.
Qualtrics, which is owned by Silver Lake, agreed in October to acquire healthcare market research firm Press Ganey Forsta in a transaction valued at $6.75 billion. That purchase is planned to be financed principally through a $5.3 billion debt package, comprised of a $3.3 billion leveraged loan and $2 billion of high-yield bonds, the people familiar with the matter said. Silver Lake did not immediately respond to a request for comment.
Bankers say the sequencing - completing the EA loan syndication before moving to the Qualtrics financing - reflects both logistical considerations and a desire to see how investors respond to larger leveraged offerings amid recent market strains. Pre-marketing conversations with investors on the Qualtrics package have already begun, and banks intend to start formal price discovery on that debt shortly after the EA sale closes.
The planned marketing and timing of these debt sales comes at a moment when many software shares have fallen sharply amid rising concerns about the potential for artificial intelligence to disrupt existing business models. That market backdrop is one reason bankers and sponsors are closely watching demand for leveraged loans and high-yield bonds tied to software borrowers.
As of the current plan, the Qualtrics debt sale is expected to close in early April, though the people familiar with the matter cautioned that the timeline could change. The coordinated approach to these offerings will provide a real-time test of investor appetite for large, complex financings in a sector experiencing heightened volatility.
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