Media: EA bondholders demand additional payments from the company
Electronic Arts (EA) faced challenges following the sale of the company to a consortium of investors. As reported by The Wall Street Journal, bondholders have lodged complaints against EA, demanding more money than the face value of their securities.
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It was reported that bondholders justified their claims with the debt incurred by EA's new owners. To acquire the company, the investors, led by the Saudi Arabia Sovereign Fund, secured long-term financing of $20 billion from JPMorgan, with the loan set to be repaid gradually by EA itself. Bondholders fear that taking on such a significant debt could weaken EA's credit profile and lead to a downgrade of its investment rating.
In this scenario, bondholders have the right to demand not the standard repayment of their securities but a buyout at 101% of the nominal value. A group of creditors holding $1.5 billion in bonds decided to exercise this right.
According to The Wall Street Journal, EA is currently attempting to resolve the situation. The company has proposed converting the bonds into assets resembling U.S. Treasury securities, but it is unclear if this option will satisfy the disgruntled bondholders.