Electronic Arts 2016 Annual Report Download - page 163

Annual Report
The Senior Notes are senior unsecured obligations and rank equally with all our other existing and future
unsubordinated obligations, including our Convertible Notes, and any indebtedness that we may incur from time
to time under our Credit Facility.
The 2021 Notes and the 2026 Notes are redeemable at our option at any time prior to February 1, 2021 or
December 1, 2025, respectively, subject to a make-whole premium. Within one and three months of maturity, we
may redeem the 2021 Notes or the 2026 Notes, respectively, at a redemption price equal to 100% of the
aggregate principal amount plus accrued and unpaid interest. In addition, upon the occurrence of a change of
control repurchase event, the holders of the Senior Notes may require us to repurchase all or a portion of the
Senior Notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of
repurchase. The Senior Notes also include covenants that limit our ability to incur liens on assets and to enter into
sale and leaseback transactions, subject to certain allowances.
Credit Facility
In March 2015, we entered into a $500 million senior unsecured revolving credit facility (“Credit Facility”) with
a syndicate of banks. The Credit Facility terminates on March 19, 2020. The Credit Facility contains an option to
arrange with existing lenders and/or new lenders for them to provide up to an aggregate of $250 million in
additional commitments for revolving loans. Proceeds of loans made under the Credit Facility may be used for
general corporate purposes.
The loans bear interest, at our option, at the base rate plus an applicable spread or an adjusted LIBOR rate plus an
applicable spread, in each case with such spread being determined based on our consolidated leverage ratio for
the preceding fiscal quarter. We are also obligated to pay other customary fees for a credit facility of this size and
type. Interest is due and payable in arrears quarterly for loans bearing interest at the base rate and at the end of an
interest period (or at each three month interval in the case of loans with interest periods greater than three
months) in the case of loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and
unpaid interest, is due and payable on March 19, 2020.
The credit agreement contains customary affirmative and negative covenants, including covenants that limit or
restrict our ability to, among other things, incur subsidiary indebtedness, grant liens, dispose of all or
substantially all assets and pay dividends or make distributions, in each case subject to customary exceptions for
a credit facility of this size and type. We are also required to maintain compliance with a capitalization ratio and
maintain a minimum level of total liquidity.
The credit agreement contains customary events of default, including among others, non-payment defaults,
covenant defaults, cross-defaults to material indebtedness, bankruptcy and insolvency defaults, material
judgment of defaults and a change of control default, in each case, subject to customary exceptions for a credit
facility of this size and type. The occurrence of an event of default could result in the acceleration of the
obligations under the credit facility, an obligation by any guarantors to repay the obligations in full and an
increase in the applicable interest rate.
As of March 31, 2016 and 2015, no amounts were outstanding under the Credit Facility. $2 million of debt
issuance costs that were paid in connection with obtaining this credit facility are being amortized to interest
expense over the 5 year term of the Credit Facility.
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