JPMorgan Set to Keep Lion’s Share of EA’s $500 Million Debt Fees

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(Bloomberg) — JPMorgan Chase & Co. is set to keep 40% of the fees tied to the $20 billion debt financing backing the take-private of Electronic Arts Inc., disappointing a large group of banks that were keen to get a bigger share of the deal.

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At 40%, JPMorgan will hold onto about $200 million of the total fee pool, according to a person with knowledge of the matter, who asked not to be identified discussing private information. The bank initially agreed to solely underwrite the debt commitment for the $55 billion acquisition.

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Around 20 lenders including Bank of America Corp., Citigroup Inc. and Morgan Stanley joined the debt financing this week, Bloomberg previously reported, clamoring to participate in the biggest buyout of all time. The rest of the underwriting group, which is expected to also include Barclays Plc, Royal Bank of Canada and others, were allocated between 1% and 5% of the financing each — less than many of them had hoped.  

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Representatives for JPMorgan and Royal Bank of Canada declined to comment. Those for EA and the consortium buying the video-game maker — private equity firm Silver Lake Management, Saudi Arabia’s Public Investment Fund and Affinity Partners — didn’t respond to requests for comment.

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The EA buyout comes amid an uptick in transactions after a prolonged quiet period for mergers and acquisitions. Bankers have been desperate to underwrite M&A and collect some of the most lucrative fees the industry has to offer. For years, they’ve primarily done the grunt work tied to refinancings and repricings, which yield less revenue and little glamor. Conor Hillery, JPMorgan’s co-head for Europe, the Middle East and Africa, expects to see “big M&A in EMEA next year.”

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The estimated $500 million fee for EA is based on an average underwriting rate on leveraged buyouts of around 2.5%, Bloomberg previously reported. That will be split between the banks on a proportional basis, depending on what percentage of the deal they take.

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With the underwriters in place, the plan is to sell the debt in the leveraged loan and high-yield bond markets in early 2026. Banks are expected to earn a fee of about 2.25% on the loans in the financing, Bloomberg previously reported. Fees for bonds will be higher than those of loans.

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The dual-currency loan is expected to pay investors 3.5 percentage points more than the benchmark rate, and will have a discounted price of 99 cents on the dollar and euro.

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The cross-border financing is structured with a $2.5 billion term loan A that will target investors looking to buy loans on a take-and-hold basis. That could attract attention from Middle Eastern and Asian banks.

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The financing is also set to comprise an $8 billion term loan B, $2.5 billion of unsecured bonds, $5 billion of secured bonds and a $2 billion liquidity facility. The final structure of the transaction will depend on market conditions at the time of the launch.

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