TKO Group Holdings Inc., the owner of UFC and WWE, priced $1 billion of five-year senior secured notes, borrowing in the bond market with proceeds that can go toward buying back its own stock.
The 6.500% notes due 2031 were issued by subsidiary TKO Worldwide Holdings LLC. The offering is expected to close on or about Nov. 13. The notes were sold only to qualified institutional buyers under Rule 144A and to investors outside the U.S. under Regulation S.
Debt for buybacks
TKO said the net proceeds will be used for general corporate purposes, which may include distributions to parent entities to fund repurchases under its previously announced share buyback program, along with related fees and expenses. Funding buybacks with secured debt lets the company return cash to shareholders without drawing down liquidity it may need for media-rights and event investments.
The notes are guaranteed by TKO Guarantor LLC and by the domestic wholly owned subsidiaries that guarantee TKO Worldwide’s existing secured credit facilities. They are secured by a first-priority lien on the same collateral and rank equally with the company’s other senior debt, ahead of unsecured obligations to the extent of the collateral’s value. Latham & Watkins represented TKO on the offering.
Sports and live events
Beyond UFC and WWE, TKO owns the Professional Bull Riders tour and is a partner in the Zuffa Boxing venture. Live sports rights have become one of the steadier sources of revenue in media, and the company has leaned on that cash flow to support both investment and capital returns.
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