JPMorgan Chase & Co.’s $20 billion debt commitment for the record-breaking buyout of Electronic Arts Inc. is classic leveraged financing, which might seem surprising in a world overrun with private credit. But the boom in alternative lenders and banks’ drive to compete still plays a role – it’s why JPMorgan has a safety net in its own $50 billion direct lending pool if there are any troubles offloading the gaming company’s debt later. Private credit can be banks’ friend as well as foe.
Most major investment banks now have access to private credit funds, either in-house like JPMorgan and Goldman Sachs Group Inc., or through partnerships with other managers like those formed by Citigroup Inc. or Barclays Plc. The EA buyout…