{"id":106083,"date":"2026-02-26T00:00:00","date_gmt":"2026-02-26T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2026\/02\/26\/bondholders-call-the-pifs-bluff-as-sp-stalls-ea-debt-maneuver\/"},"modified":"2026-02-26T00:00:00","modified_gmt":"2026-02-26T00:00:00","slug":"bondholders-call-the-pifs-bluff-as-sp-stalls-ea-debt-maneuver","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2026\/02\/26\/bondholders-call-the-pifs-bluff-as-sp-stalls-ea-debt-maneuver\/","title":{"rendered":"Bondholders call the PIF\u2019s bluff as S&P stalls EA debt maneuver"},"content":{"rendered":"

A bloc of Elect<\/strong>ronic Arts (EA) bondholders stalled a debt-buyback maneuver <\/strong>orchestrated by the PIF-led consortium taking EA private<\/strong>, Bloomberg<\/a> reports, citing people it says are in the know. Bondholders representing 75% of the 2031 notes and about 90% of the 2051 securities reportedly inked a cooperation agreement to reject a tender offer<\/a> for USD 1.5 bn of senior unsecured notes, which they claim is designed to cheat them out of a mandatory payout.<\/p>\n

What now? <\/strong>The consortium must now decide whether to sweeten the offer closer to the 101% par value or risk a protracted judicial battle that could delay the close of their landmark USD 55 bn acquisition, which is expected between April and June this year.<\/p>\n

The defeasance trap <\/p>\n

Typically, when a company is bought out in <\/strong>a leveraged buyout<\/a><\/strong>, a change of control <\/strong>clause is triggered<\/strong>, forcing the new owners to buy back existing debt at 101% of par (the full value).<\/p>\n

The loophole: <\/strong>To avoid this multi-bn-USD bill, the PIF-led group \u2014 which includes Silver Lake and Affinity Partners \u2014 attempted a workaround maneuver called defeasance. They offered to buy a portfolio of US Treasuries to back the EA bonds, arguing that because the debt was now no-risk, it should be rated investment-grade.<\/p>\n

This would have allowed them to retire the debt at a steep markdown<\/strong>, offering just USD 0.92 per USD 1 for the USD 750 mn 1.85% notes due 2031, and USD 0.74 for the USD 750 mn 2.95% notes due 2051. The tender is priced flat to the yield of on-the-run US Treasuries.<\/p>\n

\n

The S&P ratings roadblock<\/p>\n

S&P upends the strategy: <\/strong>The plan relied on getting a top-tier credit rating for the Treasury-backed bonds to bypass the downgrade trigger. However, the gambit hit a wall last Friday when S&P Global said it would not grant the higher rating, stripping the group of its primary shield.<\/p>\n

Bondholders are just digging in for better terms. <\/strong>While the 5% early premium (equivalent to 5 points of par) expired on Tuesday, the offer still stands. \u201cWe believe there is a high likelihood that bondholders will receive a better outcome by holding out,\u201d CreditSights analysts wrote.<\/p>\n

ADVISORS- <\/strong>JPMorgan is quarterbacking the tender offer as lead manager and consent agent, with Houlihan Lokey and Akin Gump Strauss Hauer & Feld providing financial advice and counsel to the bondholders.<\/p>\n

(** Tap or click the headline above to read this story with all of the links<\/strong> to our background and outside sources.)<\/p>\n","protected":false},"excerpt":{"rendered":"

The consortium must now decide whether to sweeten the offer or risk a protracted judicial battle that could delay its USD 55 bn acquisition of EA<\/p>\n","protected":false},"author":1,"featured_media":106084,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2704],"tags":[2419,4913,10,114],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-106083","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-capital-markets","tag-capital-markets","tag-electronic-arts-ea","tag-enterpriseam-ksa","tag-public-investment-fund","wpautop","entry"],"acf":{"mongo_id":"995087bf-601b-434b-bef9-e20046d9de49","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2026\/2\/1536.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Bondholders call the PIF\u2019s bluff as S&P stalls EA debt maneuver","related_issue":[106078],"teaser":"The consortium must now decide whether to sweeten the offer or risk a protracted judicial battle that could delay its USD 55 bn acquisition of EA"},"yoast_head":"\nBondholders call the PIF\u2019s bluff as S&P stalls EA debt maneuver - 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