Demand for a $2.5 billion unsecured bond is at about $7 billion, according to people with knowledge of the matter.
Electronic Arts Inc. has attracted about $25 billion of demand from investors for a nearly $15 billion debt offering to fund a buyout of the company, a sign of increased interest from buyers as banks navigate volatileBloomberg Terminal markets to offload debt tied to acquisitions.
Investors have placed about $9 billion of orders for a roughly $4 billion leveraged loan sale tied to the deal that a JPMorgan Chase & Co.-led bank group launched earlier this week, according to people with knowledge of the matter.
There's also growing interest in the junk-bond portion of the financing, which is expected to hit the market as soon as next week. Demand for a $4.75 billion secured bond has reached about $9 billion, said the people, who asked not to be identified because they're not authorized to speak publicly.
Demand for a $2.5 billion unsecured bond is at about $7 billion, the people said. The details and structure of financing -- including euro and US dollar-denominated debt -- may change, they added.
Representatives for JPMorgan and EA declined to comment, while those for the consortium buying the video-game maker didn't immediately respond to a comment request.
Volatile Markets
Demand for risky debt is under strain amid a flood of loan and bond sales tied to buyouts. Wall Street banks led by Bank of America Corp. on Friday added more bonds to a $6.9 billion debt package to finance Nexstar Media Group Inc.'s acquisition of fellow TV-station operator Tegna Inc., while cutting the size of a leveraged loan by $1 billion.
Banks are looking to offload billions of dollars of debt as the Middle East conflict pushes up oil prices, risk premiums rise, cracks widen in the private credit market and investors yank cash from funds that buy junk bonds and loans. Those deals were underwritten when demand for credit was strong -- before the outbreak of war threw markets into disarray and rekindled risks to the global economy.
JPMorgan stunned Wall Street last year by committing a record $20 billion to bankroll EA's buyout by a Silver Lake Management-led consortium. The bank has been marketing the deal for weeks -- including at its leveraged-finance mega-conference last month.
The underwriters are also selling a $4 billionBloomberg Terminal term loan B at a discount of around 98.50 cents on the dollar and an interest rate of 3.5 to 3.75 percentage points over a key benchmark. It's also pitching a €1.53 billion loan, equivalent to about $1.75 billion, at similar pricing terms.
The bond portion of the deal will include $6.5 billion of US dollar- and euro-denominated secured notes and $2.5 billion of dollar-denominated unsecured bonds, according to the people. The EA deal financing also comprises a $3.25 billion term loan A, which is typically held by banks.
