Churchill Downs Incorporated has completed a major refinancing of its senior secured credit facilities, replacing its existing revolving facility and Term Loan A with new facilities that extend their maturities to 2031. The company also closed a previously announced $500 million senior secured Term Loan B due 2033, reshaping a substantial portion of its debt structure.
The eighth amendment to Churchill Downs’ credit agreement, dated Sept. 25 and disclosed in a Sept. 28 SEC filing, establishes $1.2 billion of new revolving commitments and a $1.08225 billion Term Loan A facility. The new facilities refinance and replace the company’s existing $1.2 billion revolving commitments and approximately $1.082 billion of outstanding Term Loan A debt.
The new revolving facility and Term Loan A each carry five-year maturities, subject to provisions in the amended agreement that can accelerate maturity in certain circumstances involving other outstanding debt. Borrowings under the amended facilities bear interest at SOFR-based rates plus a spread determined by Churchill Downs’ total net leverage ratio.
The refinancing also replaces the company’s existing Term Loan B-1 facility, which had approximately $284.25 million outstanding immediately before the amendment. Churchill Downs issued a new $500 million Term Loan B due in 2033, with the proceeds intended in part to refinance existing Term Loan B debt and outstanding revolving borrowings.
The new Term Loan B carries an interest rate of SOFR plus 175 basis points and was issued at 99.875% of principal, according to Churchill Downs. The company said net proceeds will also be used for transaction fees and expenses, working capital and other general corporate purposes.
The transaction does not represent $1.7 billion of new incremental borrowing. Much of the new financing replaces existing debt, while the $500 million Term Loan B exceeds the roughly $284 million Term Loan B-1 balance it refinances. The overall transaction instead extends and restructures existing secured debt while providing Churchill Downs with a new tranche of longer-dated financing.
The refinancing comes as the company manages a sizable overall debt load. At June 30, Churchill Downs reported $4.795 billion of total debt, including $1.082 billion of Term Loan A, $284 million of Term Loan B-1 and $329 million of revolving borrowings, alongside $3.1 billion of senior unsecured notes. Net debt after current maturities and financing costs was $4.11 billion at the end of the second quarter.
The company had previously disclosed that it was evaluating ways to fund upcoming senior-note maturities using cash, operating cash flow, available revolving capacity and debt-market financing. Its $600 million of 5.50% senior notes due 2027 were outstanding at the end of June, and Churchill Downs said in the new announcement that it had issued a conditional redemption notice for those notes, with redemption scheduled for Oct. 19.
Churchill Downs said it intends to fund the 2027 notes redemption amount from its revolving credit facility. The new credit agreement therefore provides the company with continued access to a $1.2 billion revolving commitment while extending the maturity of its Term Loan A and replacing the shorter-dated Term Loan B-1 with debt due in 2033.
JPMorgan Chase, Bank of America, PNC Capital Markets, U.S. Bank, Wells Fargo Securities, Capital One, Fifth Third Bank, Truist Securities, Morgan Stanley Senior Funding and Flagstar Bank served as joint lead arrangers and joint lead bookrunners for the amendment.
Churchill Downs operates racing, gaming and wagering businesses, including Churchill Downs Racetrack and the Kentucky Derby. The company reported $4.795 billion of total debt at the end of June, making the refinancing a significant component of its capital structure as it addresses upcoming maturities and continues to manage interest-rate exposure on its variable-rate borrowings.
