Wynn Resorts to issue US$900mln in senior notes, Fitch flags ‘slow’ credit improvement

Casino operator Wynn Resorts Ltd says its financing arm is proposing a US$900-million private offering of 6.875-percent senior notes due in 2035. The notes are being issued by Wynn Resorts Finance LLC and its subsidiary Wynn Resorts Capital Corp, both indirect wholly-owned units of Wynn Resorts, according to a Thursday announcement. The offering is expected to close on or about September 22, “subject to customary closing conditions,” the firm stated. Wynn Resorts Finance intends to contribute or lend the net proceeds from the offering – together with cash on hand – to another subsidiary, Wynn Las Vegas LLC, per the release. The funds will be used to redeem in full Wynn Las Vegas and Wynn Las Vegas Capital Corp’s outstanding 5.250-percent senior notes due in 2027 and to cover fees and expenses associated with the new issuance and redemption. Fitch Ratings assigned the proposed senior unsecured notes a “BB-” long-term rating and an “RR4” recovery rating. A “BB” rating indicates an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions. S&P Global Ratings gave the Wynn Resorts’ proposed notes a ‘BB-’ issue-level rating and a ‘3’ recovery rating, indicating its expectation of a meaningful recovery of between 50 percent and 70 percent in the event of a default. Fitch described the exercise as “leverage neutral” for Wynn Resorts, which is also the parent of Macau concessionaire Wynn Macau Ltd. “Wynn’s ratings reflect its high-quality gaming portfolio, strong positions in Macau and Las Vegas that target high-value customers and robust liquidity to fund near-term capital projects,” Fitch stated in a Thursday memo. Those strengths were balanced by Wynn Resorts’ “modest diversification” and substantial capital requirements for existing and potential developments, which “could slow” improvement in the firm’s credit profile, the institution added. The institution said the stable rating outlook reflects its view that “the Macau market will keep growing, despite potential headwinds in the Chinese economy, Wynn’s strong market position in the Las Vegas market and strong free cash flow generation”. Fitch projected Wynn Resorts’ earnings before interest, taxation, depreciation, amortisation and rent (EBITDAR) leverage at 6.0 times in 2026, up from 5.8 times in 2025. The increase reflects “increased leverage” to fund the Wynn Al Marjan Island project in the United Arab Emirates (UAE) and expansion work at Wynn Palace complex in Macau. S&P expects Wynn Resorts’ adjusted net debt-to-EBITDA ratio to remain at around 5.0 times through 2027, after factoring in capital expenditure for the Enclave project at Wynn Palace and a higher equity contribution to the Wynn Al Marjan project. That remains below S&P Global’s 6.0-times threshold for a rating downgrade, it said. New projects, leverage Wynn Al Marjan is being developed by Wynn Resorts alongside local partners Marjan LLC and RAK Hospitality Holding LLC. Wynn Resorts holds a 40-percent equity interest in the UAE scheme. Wynn Resorts said in August that Wynn Al Marjan is due to open in September 2027, with the scheme’s total budget increasing by approximately US$600 million. It had previously been described as a US$5.1-billion project. The casino group’s required contribution to that project is estimated by Fitch at approximately US$1.3 billion. The rating agency noted that the UAE venture could potentially be “credit-accretive” after 2027, but highlighted cost, timing and demand risks. Assuming the UAE property reaches Fitch’s base-case forecast, the ratings agency expects Wynn Resorts’ leverage to decline to 5.4 times in 2028 on a steady-state basis. Management at the Wynn group also said last month that construction of the previously-announced event centre and theatre at Wynn Palace would begin “in the coming weeks”, following approval in July of revised land-use terms by the Macau government. The group also expects to commence construction of the US$950-million, 432-suite Enclave at Wynn Palace hotel tower before the end of this year. In Thursday’s note, Fitch said it expects EBITDA from Wynn Resorts’ Macau operations to increase by a mid-single-digit percentage in 2026. The institution forecast modest growth for the group’s two Macau properties through 2029, citing uncertainty surrounding the Chinese economy and continued promotional pressure in the market. Fitch also said it expects Wynn Resorts’ leverage to remain at the upper end of its downgrade sensitivities over the next few years, before declining after the UAE and Macau projects are completed. The rating agency said it did not expect “material debt reduction”, with improvement instead likely to come from earnings growth.