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Churchill Downs to raise $500m through notes offering and term loan

Analysis | News

Racing and gaming operator Churchill Downs Incorporated (CDI) aims to raise more than $500m through a combination of a term loan and an offering of senior notes.

The loan will raise $300m, while the notes offering will have an aggregate principal value of $200m.

The notes have been priced at 103.25% of the principal amount, or $206.5m. The loan’s interest rate is set at two percentage points above the London Interbank Offered Rate (LIBOR), a global interest rate standard.

The additional notes will be issued under the same terms as notes that CDI issued in December 2017, when the operator managed to raise $500m. This means that they will reflect an annual interest rate of 4.75% and be due in 2028. The loan will also be due in 2028.

The notes offering  is expected to close on 17 March, with the term loan expected to close at the same time.

In addition to general corporate purposes, CDI plans to use the raised funds to repay existing debts with its credit facility, and fund “related transaction fees and expenses”.

Despite a strong end to the year, CDI suffered an overall loss in 2020 as revenue dropped 20.7% to $1.05bn.