8-KMaterial AgreementsFinancial EventsExhibits & Filings

ELECTRONIC ARTS INC. 8-K Report, Material Agreement (Mar 20, 2015)

Filed March 20, 2015For Securities:EA

Summary

Electronic Arts Inc. (EA) announced on March 20, 2015, the execution of a new $500 million unsecured committed revolving credit facility, replacing its previous facility which was set to expire in February 2016. This new facility, effective March 19, 2015, matures on March 19, 2020, and provides flexibility for general corporate purposes. Importantly, no amounts were drawn under the previous facility, and no loans were made at the closing of the new agreement, indicating a strong liquidity position. The new credit facility also includes an accordion feature, allowing EA to increase commitments by up to an additional $250 million, subject to certain conditions. This demonstrates the company's proactive approach to ensuring robust financial flexibility and access to capital. The agreement includes standard covenants and events of default, typical for facilities of this nature, and is supported by guarantees from certain domestic subsidiaries.

Key Highlights

  • 1EA entered into a new $500 million unsecured committed revolving credit facility on March 19, 2015.
  • 2The new facility replaces a prior $500 million facility and matures on March 19, 2020.
  • 3The company has the option to increase the facility by an additional $250 million.
  • 4Proceeds are available for general corporate purposes.
  • 5No amounts were drawn on the prior facility, and no loans were made at the closing of the new facility.
  • 6The agreement includes customary covenants and events of default.
  • 7The new facility provides significant financial flexibility for EA.

Frequently Asked Questions

The new $500 million revolving credit facility is intended to provide Electronic Arts Inc. with financial flexibility for general corporate purposes. It replaces a previous facility that was due to expire and demonstrates the company's commitment to maintaining access to capital.

No, not immediately. The filing states that no amounts were drawn under the prior credit facility, and no loans were made under the new facility at its closing. This indicates that EA is proactively securing a line of credit for potential future needs rather than incurring debt at this time.

The new facility is for $500 million, is unsecured and committed, and matures on March 19, 2020. It also includes an option to increase the facility by up to $250 million. Interest rates are based on either a base rate or adjusted LIBOR, plus an applicable spread determined by the company's leverage ratio. It also includes standard affirmative and negative covenants and events of default.

Terminating the old credit facility is a standard practice when entering into a new, more favorable, or more suitable credit agreement. It consolidates the company's borrowing arrangements and ensures that only one set of terms and conditions is active, streamlining financial management and potentially reducing administrative costs.