EA plans to raise millions (possibly billions) in a new senior note offering to help pay for new studio acquisitions, development, and other business costs.
EA today announced that it will sell a specific amount of senior notes for an undisclosed price in a new share offering. Senior notes are debts that mature after a set period and have higher priority over existing debts. Shareholders that buy senior notes have a guarantee of a return with a set interest rate. Usually, EA would pay these senior notes off after a 5-6 year period.
Case in point: EA held a senior note offering in 2016 for $1 billion split between two maturity dates: $600 million would be due in 2021, and the remainder, $400 million, is due in 2026.
EA says it will use the funds for just about everything:
"EA intends to use the net proceeds from the offering for general corporate purposes, including but not limited to acquisitions.
"We intend to use the net proceeds from the sale of the securities to which this prospectus relates for general corporate purposes. General corporate purposes may include funding for working capital, financing capital expenditures, research and development, marketing and distribution efforts and, if opportunities arise, for acquisitions or strategic alliances. Pending such uses we may invest the net proceeds in interest bearing securities.
EA filed a preliminary prospectus with the SEC, but no actual information was revealed. We don't know how many shares EA is selling, nor do we know exact interest rates, maturity periods, or price per share.
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