Investors holding $1.4 billion in bonds want put rights honored; the company instead has pursued setting aside Treasurys to cover future payments. Electronic Arts bondholders alleged a $1.4 billion debt default, escalating a dispute over whether the videogame maker must pay them off at a premium after going private in the largest leveraged buyout of all time. An investor group notified the company of the alleged default following the completion of EA’s take-private by a consortium including Saudi Arabia’s Public Investment Fund, private-equity firm Silver Lake and Jared Kushner’s Affinity Partners.
Bondholders asserted they must be repaid at 101 cents on the dollar, a common redemption premium after a corporate borrower undergoes a change in control, according to a bondholder communication sent last week and reviewed by WSJ Pro.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing