Wynn Resorts Maintains Ratings Despite Refinancing Plans

Strategic Insights -

Wynn Resorts Limited's ratings have been unaffected by its decision to refinance $800 million of outstanding senior unsecured notes due 2025 with new $800 million of senior unsecured notes due 2033. The excess funds will be used for general corporate purposes, potentially covering part of the $130 million forfeiture under a non-prosecution agreement. Fitch Ratings expects the company to remain within its leverage sensitivities and maintains its Issuer Default Rating (IDR) of 'BB-' with a Stable Rating Outlook. The transaction will extend the company's near-term bond maturities, with the new notes expected to be rated similarly to the existing unsecured notes of 'BB-'/'RR4'. Fitch anticipates EBITDAR leverage for 2024 to be around 5.6x, with sensitivities for a downgrade at 6.0x. The ratings reflect the company's high-quality gaming assets, expected improvement in Macau's gaming market, and strong results in Las Vegas, offset by its average diversification and capital requirements.

Key Takeaways:

  • Wynn Resorts' IDR remains at 'BB-' with a Stable Rating Outlook, despite refinancing plans.
  • The company refinance $800 million of outstanding senior unsecured notes due 2025 with new $800 million of senior unsecured notes due 2033.
  • Excess funds will be used for general corporate purposes, including covering part of the $130 million forfeiture under a non-prosecution agreement.
  • Fitch expects Wynn Resorts to remain within its leverage sensitivities, with EBITDAR leverage for 2024 estimated at 5.6x.
  • Sensitivities for a downgrade would be 6.0x, indicating a relatively narrow margin for credit improvement.
  • The company operates in two of the largest gaming markets in the world, but risks are mitigated by robust liquidity and strong results in Las Vegas.
  • The ratings reflect the company's high-quality gaming assets and expected improvement in Macau's gaming market.
  • Capital requirements for current and potential capital projects may affect the pace of more meaningful credit improvement.

Statistics:

  • EBITDAR leverage for 2024: 5.6x
  • Sensitivities for a downgrade: 6.0x
  • Amount of refinanced outstanding senior unsecured notes: $800 million
  • New notes due date: 2033
  • Excess funds for general corporate purposes: $130 million
  • Forfeiture under non-prosecution agreement: $130 million

Sources:

  • Fitch Ratings, "Wynn Resorts Limited: Wynn Resorts to Refinance $800 Million of Senior Unsecured Notes"