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EA Bondholders Fight Debt Buyback as S&P Casts Ratings Doubt

Reshmi Basu, Gowri Gurumurthy
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A group of bondholders is resisting Electronic Arts’ proposed debt buyback plan, forming a coalition to challenge the video-game company’s financial maneuver aimed at restructuring its obligations. The bondholders, representing over 75% of 2031 notes and 90% of 2051 securities, signed a cooperation agreement to oppose the tender offer, according to insiders familiar with the private negotiations. S&P Global Ratings questioned whether the buyback would achieve cost savings for the private equity group leading EA’s privatization, raising doubts about the financial rationale behind the move. The dispute centers on EA’s attempt to repurchase debt at a discount, a strategy bondholders argue could undermine their returns and destabilize the company’s long-term financial health. The standoff highlights broader tensions between corporate debt strategies and investor protections, with implications for future leveraged buyouts in the gaming and tech sectors.
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Video Games:Some of Electronic Arts Inc. bondholders are banding together to fight a debt buyback plan by the video-game maker, even as S&P Global Ratings cast doubt that the maneuver would ultimately save money for the group taking the company private. The bondholders have formed a cooperation agreement, according to people familiar with the matter. Holders of more than 75% of the 2031 notes and about 90% of the 2051 securities affected by the tender offer have signed the pact, said the people, who asked not to be identified discussing private information.

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Source: Bloomberg Technology

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