Churchill Downs Incorporated (CDI) has announced that its CDI Escrow Issuer subsidiary has successfully priced an upsized offering of $1.2bn in aggregate principal amount of its 5.75% senior notes due 2030.
Subject to closing conditions, the notes offering is expected to close April 13, 2022.
The sale is part of the company’s plan to finance its deal to acquire all assets of Peninsula Pacific Entertainment (P2E).
Assets included in the deal are P2E’s properties in Virginia and New York, along with the operations of its Sioux City casino.
The purchase agreement is expected to complete by the end of this year, pending approvals from the Virginia Racing Commission, the New York State Gaming Commission and the Iowa Racing & Gaming Commission.
The company will place the proceeds of the proposed offering in an escrow, pending acquisition closing conditions. Once the conditions are met, CDI plans to use those funds, along with other money borrowed to complete its transaction with P2E.
The offer and sale of the notes have not been registered under the Securities Act of 1933, however, but they are being sold only to those who are reasonably believed to be qualified institutional buyers in compliance with Rule 144A.
CDI has agreed to register the notes for resale so that they are not freely tradable a year after they are issued, in accordance with the Securities Act. They also will not be listed on any automated quotation system or securities exchange.
CDI is a racing, online wagering and gaming entertainment company. It currently operates historical racing machines HRMs in Kentucky. The company plans to operate in Virginia and Louisiana, pending the closing of the acquisition of Peninsula Pacific Entertainment and the completion of HRM expansion plans for CDI’s 14 off-track betting facilities.
CDI is also the host of the annual Kentucky Derby.
