JPMorgan Preps Launch of EA Debt Financing for $55B LBO at Wider Pricing Following AI-Induced Software Fallout

JPMorgan is planning to launch its multibillion-dollar cross-border debt package financing video game developer Electronic Arts’ $55 billion leveraged buyout next week at wider initial pricing given recent AI-induced software volatility rattling markets, according to sources.

The $20 billion debt package for EA’s buyout by an investor consortium composed of Saudi Arabia’s sovereign wealth fund, PIF, as well as Silver Lake and Affinity Partners has been premarketing for the last month, according to sources.

JPMorgan is looking to take orders ranging from $250 million to $1 billion in size from prospective investors, sources said. However, pricing on the syndicated debt, which will be denominated in US dollars and euros, has widened about 100 bps in recent weeks, sources said, due to the software sector selloff.

Initial price talk on EA’s leveraged loans is now SOFR+350 bps-375 bps and 98.5-99 OID, according to sources, while the high-yield bonds are being talked in the low-to-mid-7% area.

One leveraged loan investor familiar with the deal noted that it will be difficult to price at the current margin given where the software sector is trading. The investor added that, in general, software loans are trading in the low-90s area while well performing ones are at about 95.

EA is certainly affected by the threat of AI on the software and video game development industry, noted a high-yield bond investor familiar with the deal. But EA’s proprietary licensing on games, such as EA Sports Madden NFL and EA Sports NHL, is strong and should be taken into consideration when determining pricing.

A banker involved in EA’s offering said that ultimately, the deal will get done given PIF’s influence on the market despite current volatility around the threat of AI on the software sector.

JPMorgan has been trying to derisk the large leveraged loan package by filing the order book with reverse interest before a broader launch, one investor noted. The EA deal is expected to consist of a $10.5 billion offering in the U.S. market and a €4 billion offering in Europe, third-party press reported.

Earlier this year, JPMorgan and the other banks on the deal received strong demand for the term loan A portion of EA’s debt package, as reported.

JPMorgan previewed the financing to many investors at its flagship leveraged conference last week. EA’s offering was the most talked-about deal at the conference where dealmaking was jolted by the war in Iran and ongoing concern around AI’s disruption to software credits.

Leveraged finance participants said they are closely watching AI’s disruption of the software sector as they determine pricing for EA’s deal, as reported. Volatility stemming from the threat of AI in the software industry may affect pricing on high-yield bonds and leveraged loans for the video game developer’s LBO, according to market participants, with EA being among several primary deals expected to be affected by these dynamics. Accounts that had large amounts of reverse orders in for the deal will likely recalibrate now, one investor said at the time.

EA, which develops popular video game titles such as “EA Sports Madden NFL” and “Battlefield,” announced in September 2025 that it had entered into a definitive agreement to be acquired by an investor consortium composed of PIF, Silver Lake and Affinity Partners in an all-cash transaction that values the company at $55 billion. The acquisition was approved by stockholders in December 2025.

Octus’ analysis calculates EA’s gross leverage jumping to 7.4x, assuming incremental debt of $18 billion at the close of the transaction and EBITDA in line with LTM levels.

Octus recently hosted a webinar on how investors can navigate fallout in the software sector stemming from AI advancements.

Electronic Arts’ capital structure as of June 30, 2025, is below:
 

JPMorgan and EA declined to comment. The investor consortium did not respond to a request for comment.