Churchill Downs Incorporated priced a $500 million senior secured term loan on September 17, carrying interest at the Secured Overnight Financing Rate plus 175 basis points. The borrowing was issued at 99.875%, implying net proceeds of $499.375 million before fees and expenses. The company intends to use the funds to repay existing Term Loan B and revolving credit facilities, cover transaction costs, and support working capital needs.
The refinancing extends the company’s debt maturity profile by replacing existing borrowing due in 2028 with obligations maturing in 2033, providing additional time to generate cash and service obligations. Churchill Downs also plans to redeem its 5.50% senior notes due in 2027 using revolver borrowing, with a conditional redemption notice expected within 30 days of loan issuance. The new term loan maintains the same credit spread as the existing Term Loan B disclosed in the June quarterly filing.
The transaction introduces increased exposure to floating-rate debt structures. At June 30, the company held $600 million of fixed-rate 5.50% notes outstanding, generating approximately $33 million in annual interest expense. Should the company replace these notes entirely with unhedged floating-rate revolver borrowing, each one-percentage-point increase in the benchmark rate would add roughly $6 million to annual interest costs on the replacement debt. Current revolver pricing was set at SOFR plus 160 basis points based on June terms.
Liquidity considerations accompany the refinancing activity. Revolver availability stood at $861 million following the June 30 measurement period after accounting for outstanding letters of credit. Proceeds from the new term loan directed toward repaying existing revolving debt would theoretically expand available capacity, while borrowing needed for the note redemption would reduce it. The completed transaction impact on net liquidity remains subject to final execution and regulatory approval.
Continued debt service capability will ultimately depend on the company’s operational cash generation. The refinancing provides maturity flexibility while modifying interest-rate exposure characteristics through increased reliance on variable-rate instruments. Final borrowing costs after fees, hedging strategies, and remaining credit capacity will determine whether the restructuring materially reduces overall financial risk.
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