EA reportedly leans on a private rating as bondholders claim default

EA has obtained an investment-grade rating from Egan-Jones for a subset of its bonds, and is using it to argue it does not owe creditors a 101-cent payout after the largest leveraged buyout on record. Egan-Jones is under SEC investigation over whether commercial pressure shaped its ratings, and it is certified to operate in the EU.

Electronic Arts has told creditors it holds an investment-grade rating for some of its bonds, and is using it to argue it owes them nothing after going private. About $250M is at stake.

The creditors say a default occurred because EA missed a change-of-control payout, people familiar with the matter told Bloomberg. EA says an arcane manoeuvre called defeasance means it owes no premium.

Saudi Arabia’s Public Investment Fund, Silver Lake and Jared Kushner’s Affinity Partners took EA private on 4 August for $55B, the largest leveraged buyout on record.

Two sets of...

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