JPMorgan Chase launches $5.75 billion loan sale to assist Electronic Arts Inc. in going private.

Wall Street banks led by JPMorgan Chase have launched a $57.5 billion cross-border leveraged loan sale plan to help acquire video game manufacturer Electronic Arts Inc. This is one of the largest deals of its kind. Electronic Arts Inc. will be acquired by a consortium consisting of private equity firm Silver Lake Capital, the Public Investment Fund of Saudi Arabia (PIF), and Affinity Partners, managed by Jared Kushner, the son-in-law of U.S. President Trump. The valuation of this electronic gaming company in the deal is approximately $55 billion. A $40 billion loan is being sold at a discounted price of around 98.50 cents on the dollar, meaning investors only need to pay $0.985 for every $1 of face value purchased. This discount is aimed at increasing the actual yield for investors to offset the credit pressure of the total $55 billion deal amount. In addition to the discount, the loan's interest rate is set at 3.50 to 3.75 percentage points above the benchmark rate. This $40 billion is part of JPMorgan's $57.5 billion dollar-denominated loan, which also includes around $17.5 billion in euro-denominated loans. JPMorgan is also marketing a 15.3 billion euro (approximately $17.5 billion) loan with similar pricing terms. According to a source, the lenders will hold a conference call on Tuesday morning to discuss the deal. The lenders have committed to a deadline of March 23rd. All of these debt instruments together constitute the underlying funding supporting Silver Lake Capital, PIF, and Affinity Partners' acquisition of Electronic Arts Inc. JPMorgan will share $200 billion in debt with around 20 loan institutions including Bank of America Corp, Citigroup, and Morgan Stanley one of the largest acquisition commitments ever. This deal is one of the largest leveraged buyouts in history, surpassing the $45 billion TXU acquisition in 2007, highlighting Wall Street's willingness to support major transactions despite economic concerns and overvalued assets. It is expected that M&A-related loans will be highly active this year, with the highlight so far being the $72.5 billion acquisition deal of Hologic Inc., the largest leveraged loan since 2021. However, the financing of Electronic Arts Inc. will test investors' willingness due to market turmoil caused by the Iran war and the disruptive impact of artificial intelligence, which has already greatly affected secondary loan prices.