TKO Prices $1.0 Billion of Secured Notes at 6.500%, Due 2031
Key Facts
TKO Group priced $1.0 billion in aggregate principal amount of senior secured notes bearing annual interest of 6.500% and maturing in 2031, according to a company statement dated November 5, 2026. The offering is being made through its indirect subsidiary, TKO Worldwide Holdings, LLC. The company intends to use the net proceeds for general corporate purposes, which may include distributions to its parent companies to fund share repurchases. Proceeds may also cover fees and expenses related to the offering. The transaction is expected to close on or about November 13, 2026, subject to customary closing conditions.
The notes are guaranteed by TKO Guarantor and the wholly owned domestic subsidiaries that guarantee the existing credit facilities. Noteholders will have a first-priority lien on the collateral securing those facilities, according to the company statement. The notes will also rank equally in right of payment with the issuer's and guarantors' existing and future senior debt. They will rank ahead of unsecured debt or debt secured by lower-priority liens, to the extent of the collateral's value. This structure puts repayment priority at the center of the offering terms alongside the interest rate and maturity.
S&P assigned the proposed issue a BB rating and a recovery rating of 1. The agency said the recovery rating reflects its expectation of very high lender recovery in a hypothetical default scenario. It estimated a recovery range of 90% to 100%, with a rounded estimate of 90%. The recovery assessment reflects the first-priority collateral and debt ranking identified by the agency. The BB rating applies to the issue, according to the agency's analysis published on November 5, 2026.
S&P's analysis said the capital structure includes a $350 million first-lien revolving credit facility due in 2030 and a $4.6 billion first-lien term loan due in 2031. The analysis also cited $63 million of other debt. The proposed notes sit alongside the facility and term loan within this structure, according to the agency. These amounts describe the obligations covered by the offering's guarantees and stated repayment ranking. The term loan and notes share a 2031 maturity, a common feature of the debt schedule described by the agency.
In the latest financial results available in the information provided, TKO reported net income of about $277.9 million in the third quarter of 2026, compared with $106.8 million in the same period of 2025, according to Investing.com. The financing announcement coincides with the company's plan to use a potential portion of net proceeds to support share repurchases. However, the offering statement described this use as a possibility among the company's general purposes, rather than a full and final allocation of proceeds. Repurchases therefore remain tied to what the company may decide about distributions to its parent companies. The third-quarter result provides financial context for the period in which TKO announced the note terms.
TKO shares ended the November 5 session down 2.24% at $189.14, after trading between $186.03 and $199.98, according to Stock Analysis. Investing.com reported that the stock was at $199.94 in premarket trading at 9:24 a.m. Eastern time, before falling to $187.83 at 1:14 p.m., down 2.92% at that time. The intraday price reading differs from the closing price, with trading ending at $189.14. The move places the stock in the context of the day the notes were priced, without by itself establishing the reason for the decline. The deal was announced the same day, while its expected closing remains subject to closing conditions.
Among upcoming events cited by Investing.com, WWE Crown Jewel will take place in Riyadh on November 7, 2026. The platform also listed UFC Fight Night in Doha on November 21 and a UFC Fight Night event in Saudi Arabia on December 5. These dates follow the November 5 session, when the stock declined. The expected November 13 closing, or a date close to it, remains the next milestone directly related to the financing. The closing is subject to customary conditions, according to TKO's statement.