Kentucky Derby Operator Sells $600 Million in Junk Bonds

Churchill Downs Inc., owner of the racetrack that hosts the annual Kentucky Derby, sold $600 million of junk bonds Tuesday to repay existing debt.

(Bloomberg) — Churchill Downs Inc., owner of the racetrack that hosts the annual Kentucky Derby, sold $600 million of junk bonds Tuesday to repay existing debt.

The notes, which were sold at par, priced at 6.75%, in line with the initial price talk between 6.75% to 6.875%. JPMorgan Chase & Co. led the transaction. S&P Global Ratings Inc. assigned a B1/B+ rating, or four levels below investment grade, to the notes.

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 95.250 cents on the dollar at 3:54 p.m. in New York, according to Trace.

(Updates throughout with pricing information.)

More stories like this are available on bloomberg.com