U.S.-based casino developer Wynn Resorts Ltd announced on Tuesday a private offering of US$800.0 million in aggregate principal amount of 6.250-percent senior notes, due in 2033. The offering will be via two subsidiaries: Wynn Resorts Finance LLC and Wynn Resorts Capital Corp.
The announcement said proceeds from the offering are intended for the refinancing of an outstanding US$600 million of Wynn Las Vegas LLC 5.5 percent notes due in 2025; and to pay fees and expenses related to the redemption of the existing notes.
The remainder of the net proceeds will be used for general corporate purposes, which includes “covering all or a portion” of the US$130 million forfeiture under a non-prosecution agreement with the U.S. Department of Justice (DOJ).
Under the latter settlement, disclosed on Friday, the casino group agreed to forfeit US$130 million to resolve a 10-year-old investigation into transactions at Wynn Las Vegas that were related to foreign customers.
Aside from Wynn Las Vegas and Encore in Nevada, Wynn Resorts also runs casino properties in Massachusetts in the U.S., as well as Wynn Macau and Wynn Palace in the Macau market via Wynn Macau Ltd.
Fitch Ratings Inc said in a Tuesday memo that Wynn Resorts’ ratings were “unchanged” following the refinancing announcement.
“Fitch does not expect any change to the issuer default rating or recovery assumptions given the company is expected to remain within leverage sensitivities,” stated the institution.
“The transaction will allow the company to extend its near-term bond maturities,” it added.
Fitch last rated Wynn Resorts in January, when it assigned a ‘BB-’ issuer default rating, with a “stable” outlook.
CBRE Capital Advisors Inc said in a Tuesday report that it was “not overly concerned” with the announcement of the settlement between Wynn Resorts and the DOJ, given it “signals a resolution of the issue”, and is “a manageable cash outflow”.
“In addition, similar fines against other casino operators – albeit smaller – have not had long-term impacts on their businesses or credit profiles,” wrote analysts Colin Mansfield and Connor Parks.
