Core Viewpoint - S&P Global Ratings is considering downgrading Electronic Arts Inc. (EA) to "junk" status due to an expected addition of approximately $20 billion in debt from a recent acquisition deal [1][2] Group 1: Acquisition Details - EA has agreed to be sold to an investor group that includes Saudi Arabia's Public Investment Fund, Silver Lake Management, and Affinity Partners led by Jared Kushner, with an enterprise value of $55 billion [2] - The acquisition is set to be the largest leveraged buyout in its category, with $20 billion in debt financing committed by JPMorgan Chase [2] - EA's stock price rose by 4.5% recently, with a market capitalization around $50.5 billion, still below the privatization valuation [2] Group 2: Credit Ratings - EA currently holds a "BBB+" rating from S&P, which is three levels above junk status, while Moody's rates it "Baa1" and Fitch rates it "A-" [1][3] Group 3: Company Performance and Strategy - EA is in a recovery phase, leveraging a strong portfolio of game IPs, including sports titles and long-term service games, contributing to a stable recovery [4] - The company's performance is driven by a combination of sports games and long-term service models, with significant contributions from titles like EA SPORTS FC and Apex Legends [4] - The privatization is expected to alleviate pressures from quarterly earnings reports and investor demands, enhancing revenue predictability, particularly in the sports gaming sector [5] Group 4: Future Prospects - Analysts anticipate that the upcoming release of Battlefield 6 on October 10 will boost EA's performance, with pre-release interest already contributing to a 15% increase in stock price this year [5] - The privatization may increase operational leverage and lower ratings, but continued operational stability could mitigate some financial cost pressures [5]