JPMorgan’s $20 Billion EA Financing to Be Split Among Banks

Core Viewpoint - The consortium led by Silver Lake Management, Saudi Arabia's Public Investment Fund, and Affinity Partners is set to expand its underwriting group for the leveraged buyout of Electronic Arts Inc., with JPMorgan Chase & Co. initially providing $20 billion in debt financing [1][2]. Group 1: Underwriting Group Formation - Approximately 15 banks are expected to join the underwriting group, with some banks potentially joining as early as next week [1][3]. - Each participating bank is anticipated to take around 10% of the deal, equating to about $2 billion per bank, while JPMorgan will retain approximately 40% of the deal [3]. Group 2: Financial Structure and Fees - Underwriters are projected to earn a fee of about 2.25% on the loans, with bond fees expected to be higher than those for loans [3][4]. - The financing structure includes a $2.5 billion term loan A, an $8 billion term loan B, $2.5 billion of unsecured bonds, $5 billion of secured bonds, and a $2 billion liquidity facility [5][6]. Group 3: Market Implications - The deal represents a significant test for the banking industry in managing and allocating large amounts of capital globally, as it is the largest commitment ever made by a single bank for a leveraged buyout, totaling $55 billion [4]. - The banks plan to sell the debt in the leveraged loan and high-yield bond markets in early 2026, targeting investors interested in a take-and-hold strategy [5].