Back-to-back Qualtrics, EA debt sales to test debt investors’ appetites in volatile market

By Matt Tracy and Saeed Azhar

March 18 (Reuters) – A group of banks led by JPMorgan Chase plans to market a debt package tied to software firm Qualtrics’ purchase of peer Press Ganey Forsta after ​concluding a debt sale for the take-private of game publisher Electronic ‌Arts, according to two people familiar with the matter.

JPMorgan is the lead banker on both transactions, seen as a test case by bankers for how future leveraged finance transactions navigate the market volatility that has hit the technology sector, they said.

The group launched the sale of ‌a $5.75 ​billion cross-border loan to finance EA’s leveraged buyout on ⁠Monday, with an aim to ⁠close that deal by end of day March 23 before it negotiates pricing for the Qualtrics debt, one of the people familiar said.

EA in September said it agreed to be acquired by an investor consortium including Saudi Arabia’s ​Public Investment Fund, Silver Lake and Affinity Partners. The record $55 billion LBO deal, which is expected to close in June, is being financed in part ⁠by a seven-year term loan B, a $3.25 billion ⁠term loan A and $9 billion in other dollar and euro-denominated ​secured and unsecured debt.

The debt offering has so far garnered more than $19 billion ​in investor demand since its Monday primary market launch, the first person ‌familiar said.

Qualtrics declined to comment. EA did not immediately respond to requests for comment.

Qualtrics, which is owned by Silver Lake, announced in October an agreement to buy healthcare market research company Press Ganey Forsta in a $6.75 billion deal. It is ⁠being financed largely by a $5.3 billion debt package that includes a $3.3 billion leveraged loan and $2 billion in high-yield bonds, both people familiar said.

Silver Lake did not immediately ⁠respond to a request for ‌comment.

Marketing plans for this and other debt tied to ⁠software borrowers come as numerous shares have dropped sharply due ​to rising ‌concerns over the disruption of software businesses by artificial ​intelligence.

The banks plan ⁠to begin price discovery for the Qualtrics debt shortly after the EA debt sale closes. They have already begun pre-marketing discussions with investors, the first person familiar  said. The Qualtrics debt sale is expected to close in early April, but that timeline could change, both people familiar said.

(Reporting by Matt Tracy; editing by Megan ​Davies and David Gaffen)