Image credit: Source: DraftKings Inc. SEC filing, August 25, 2026.
DraftKings closed a $700 million secured Term Loan B on August 25, upsized from the $600 million it had announced earlier this month after lenders oversubscribed the deal, and will use the proceeds to buy back a slice of the 0% convertible notes it has coming due in 2028. DraftKings also closed a new $750 million revolving credit facility the same day, replacing an existing $500 million revolver not set to expire until November 2029, inside a single amendment to its credit agreement with Morgan Stanley Senior Funding as administrative agent.
The Term Loan B matures in August 2033 at SOFR plus 2.00 percentage points, sold at 99.50% of face value with 1% of principal amortizing each year. The new revolver runs to August 2031 at a floating margin of 1.75 to 2.25 points over SOFR, depending on DraftKings' leverage ratio, according to the filing.
DraftKings is trading a debt-free instrument for a cash-paying one. Its outstanding converts carry a 0% coupon, the cheapest financing available, but mature in 2028 and would either need cash to redeem or dilute shareholders on conversion. New secured debt at SOFR plus 2%, more than two years ahead of that wall, costs real interest every quarter, but puts DraftKings in control of the timing and size of the retirement instead of leaving it to bondholders.
The upsize is the part worth reading. Lenders committed $100 million more than DraftKings sought, on a balance sheet still absorbing state betting taxes and the end of the tax-free free bet. That is confidence pricing, not strain, on the balance sheet also funding DraftKings Predictions, the company's federally regulated event-contracts unit competing with Kalshi and Polymarket.
DraftKings did not say how much of the 2028 converts it intends to repurchase, only that buybacks are "subject to availability and market conditions." How much of the $700 million actually retires converts, versus sitting on the balance sheet for general corporate purposes, is the number to watch next.
The upsize is the tell, not the refinancing
A $100 million oversubscription on a routine debt swap is a small data point next to DraftKings' quarterly numbers, but it is a cleaner read on lender sentiment than anything in an earnings call. Bondholders do not oversubscribe a company they think needs the cash to survive. They oversubscribe one they expect to keep paying on time for eight more years.
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