8-KMaterial AgreementsFinancial EventsExhibits & Filings

ELECTRONIC ARTS INC. 8-K Report, Material Agreement (Aug 30, 2012)

Filed August 30, 2012For Securities:EA

Summary

Electronic Arts Inc. (EA) has filed an 8-K report announcing the entry into a new, unsecured committed $500 million revolving credit facility. This facility, established on August 30, 2012, with JPMorgan Chase Bank, N.A. as the Administrative Agent, provides EA with significant financial flexibility for general corporate purposes. The credit line has a maturity date of February 29, 2016, and includes an option to increase commitments by an additional $250 million under certain conditions, further enhancing its liquidity. This move is a strategic step to ensure robust financial resources are available for operations and potential future investments. The facility is supported by guarantees from certain domestic subsidiaries and carries interest rates tied to EA's leverage ratio, with options for either base rate or adjusted LIBOR. The agreement also outlines standard covenants and events of default typical for such financial arrangements, ensuring prudent financial management.

Key Highlights

  • 1EA has secured a new $500 million unsecured revolving credit facility.
  • 2The credit facility has a maturity date of February 29, 2016.
  • 3The agreement includes an option to increase the facility by an additional $250 million.
  • 4Proceeds from the facility are designated for general corporate purposes.
  • 5Interest rates are variable, based on EA's consolidated leverage ratio.
  • 6Certain domestic subsidiaries will provide guarantees for the facility.
  • 7The facility features customary covenants and events of default.

Frequently Asked Questions

The primary purpose of this new $500 million revolving credit facility is to provide Electronic Arts Inc. with financial flexibility for general corporate purposes. This can include funding ongoing operations, strategic initiatives, or other general business needs.

The revolving credit facility matures on February 29, 2016.

Yes, the Credit Agreement includes an option that permits EA to arrange for up to an additional $250 million in commitments from existing and/or new lenders, subject to meeting certain requirements.

Yes, the Credit Agreement contains customary affirmative and negative covenants, which include limitations on subsidiary indebtedness, granting of liens, asset dispositions, and dividend payments. EA is also required to maintain a specific capitalization ratio and minimum levels of total and domestic liquidity.