Kentucky Derby Operator to Sell $600 Million in Junk Bonds

Churchill Downs Inc., known for its ownership of the racetrack that hosts the annual Kentucky Derby, is selling $600 million of junk bonds to repay existing debt.

(Bloomberg) — Churchill Downs Inc., known for its ownership of the racetrack that hosts the annual Kentucky Derby, is selling $600 million of junk bonds to repay existing debt.

Initial price talk for the senior unsecured notes, which are due in eight years and set to price today, is between 6.75% and 6.875%, according to people familiar with the matter. An investor call is being hosted at 11 a.m. today. JPMorgan Chase & Co. is leading the transaction.

The Louisville, Kentucky-based company will use the proceeds to repay outstanding debt under its term loan B facility and for general corporate purposes.

The primary market for high-yield debt is in recovery after it was frozen for most of March following the global banking turmoil. Last week, more than $8 billion in new junk bonds priced in two sessions, the busiest in nearly two months, and a group of banks led by Goldman Sachs Group Inc. offloaded a $3.84 billion bond tied to last year’s buyout of Citrix Systems Inc.

Churchill Downs tapped the primary market last year, with the sale of $1.2 billion of junk bonds rated B1/B+ to help finance its $2.5 billion asset purchase of Hard Rock Sioux City-owner Peninsula Pacific Entertainment LLC.

Those notes, due 2030 and carrying a 5.75% coupon, last changed hands at 95.283 cents on April 6, according to Trace.

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