A banking syndicate led by JPMorgan on Monday began marketing a $5.75 billion loan intended to help fund the leveraged buyout of Electronic Arts, according to a term sheet reviewed for this report. The instrument being sold is a seven-year term loan B that comprises a $4 billion U.S. dollar tranche and a €1.531 billion tranche - the euro portion noted in the term sheet as the roughly $1.75 billion equivalent.
The loan forms part of the financing package for the $55 billion take-private transaction arranged by a group of investors that includes Saudi Arabia’s Public Investment Fund, Silver Lake and Affinity Partners. The term sheet also lists a $3.25 billion term loan A and a further $9 billion of additional secured and unsecured debt denominated in both dollars and euros as elements of the broader capital structure backing the deal.
Banks are marketing the $4 billion dollar tranche together with the €1.531 billion tranche at a price of 98.5 cents on the dollar. The loans carry a floating interest margin set in the term sheet at between 350 basis points and 375 basis points above benchmark rates - specified as the Secured Overnight Financing Rate (SOFR) for the dollar tranche and Euribor for the euro tranche.
The term sheet sets the deadline for the loan sale at market close on March 23. The take-private transaction itself is expected to close in June, per the investors’ announcement in September. Electronic Arts did not immediately respond to a request for comment.
This syndication effort highlights the cross-border nature of the financing, with lenders offering both dollar and euro-denominated facilities, and reflects standard practice in large leveraged buyouts where multiple tranches and a mix of secured and unsecured instruments are used to assemble the required capital.
Context and mechanics
The seven-year tenor of the term loan B and the pricing mechanics described in the term sheet - a modest discount to par at initial placement and a floating spread over short-term benchmarks - are consistent with how institutional leveraged loan markets typically structure medium-term tranches for sponsor-backed buyouts.
Next steps
Investors interested in the loan package must respond by the sale deadline specified in the term sheet. The broader financing package, including the term loan A and the additional $9 billion of debt instruments, remains part of the capital plan supporting the planned June closing.