Hi and welcome to The Weekly Fix. I'm Jeff Jablons, Senior High Yield Analyst covering the telecom, cable, satellite, and technology sectors.

Today we're going to discuss Electronic Arts or EA, which successfully priced $18 billion of debt last week. EA raised this debt to fund the biggest leveraged buyout (LBO) in history. To find the previous record, we have to go back almost 20 years—to 2007, when TXU was taken private for $45 billion.

By way of background: Electronic Arts is a leading video game publisher, well known for blockbuster franchises like FC, Madden, Battlefield, and The Sims. In September 2025, EA announced it was being taken private in a $55 billion transaction by three investment firms: Saudi Arabia's Public Investment Fund or PIF, which will be the majority investor, along with Silver Lake and Affinity Partners.

So, what makes this deal stand out? Three key factors:

First—the capital structure is inverted. Traditionally in leveraged buyouts, equity sponsors fund 25-40% of the purchase price and borrow the remaining 60-75% through a combination of high yield bonds, leveraged loans, and private debt. The EA deal flips that dynamic entirely. Here, you have $18 billion in debt funding and $36 billion in equity funding. While this isn't entirely unheard of—especially in tech deals with high purchase multiples—it's certainly not the norm.

Second—the equity check is massive. At $36 billion, this is an extraordinary commitment. While the exact equity splits aren't finalized among PIF, Silver Lake, and Affinity, here's what we know: Silver Lake is committing at least $2 billion and has the option to upsize to $4 billion. Affinity Partners is committing $400 million with the option to upsize to $800 million. Both firms could potentially increase their commitments further if PIF agrees. Regardless of the final allocation, PIF is taking down the vast majority of that $36 billion equity check. Put simply: this deal would not be possible without PIF's support. A $30 billion-plus equity commitment is simply too large for a traditional private equity sponsor to undertake alone.

The third thing that’s unique—JPMorgan's underwriting commitment.  When the deal was first announced, the market was surprised to hear that JPMorgan agreed to underwrite the entire $20 billion financing commitment. Typically, when mega-LBOs are announced, you see a consortium of banks underwriting the deal to spread out the risk. It was a huge vote of confidence from JPMorgan to take down the whole bridge commitment. Now, JPM did eventually syndicate out the risk and brought in multiple partners, but that initial commitment was notable.

To fund this transaction, EA tapped a variety of markets across both the US and Europe. The company raised capital in the US dollar Term Loan A market, US dollar and Euro Term Loan B markets, as well as the US and European high yield bond markets. We saw extremely strong investor demand across all asset classes.

While we've certainly experienced heightened volatility in the high yield and leveraged loan markets during the first quarter of this year, this deal demonstrates that there's still the ability to get large, complicated transactions done—under the right circumstances.

And with that, I'll thank you for joining me on this edition of The Weekly Fix.