EA Secures Commitment to Borrow Funds, if Necessary, to Purchase Take-Two Interactive

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In a filing with the United States Securities and Exchange Commission, Electronic Arts confirmed that it has secured loan commitments for an additional $1 billion to ensure it has the cash on hand to pay for a possible acquisition of Take-Two Interactive.
EA already has around $2.3 billion of cash and short-term investments with which to fund the potential purchase. With the addition of the senior unsecured term loan commitment, EA has access to $3.3 billion to throw its weight around. The loan commitment is being provided by a syndicate of institutions including Morgan Stanley, BNP Paribas, KeyBank and the Bank of Nova Scotia.

In case you aren't clear how a commitment differs from a loan, it means the various institutions have promised to loan EA the money if it asks (and adheres to predetermined conditions). To get the commitment, EA has to pay a commitment fee, and will have to pay interest on the loan as normal if the loan becomes drawn.

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This page contains a single entry by Editor published on May 9, 2008 10:29 PM.

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