Macau casino operator Wynn Macau Ltd said in a Sunday filing it had reached a purchase agreement with Deutsche Bank AG, Singapore branch, the representative of the “initial purchasers”, in relation to the issuing of US$750-million in senior unsecured notes as part of its efforts to weather the impact of Covid-19.
The 5.500-percent notes due in 2026 are due to raise net proceeds of approximately US$743.1 million after discounts and commissions of the initial purchasers and estimated offering expenses payable by the company.
Covenants attached to the notes “limit” Wynn Macau Ltd’s ability either to “effect a consolidation or merger” ; or to “sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the company and its subsidiaries”.
The firm – controlled by United States-based casino operator Wynn Resorts Ltd – runs the Wynn Macau and Wynn Palace properties in the Macau market. The Macau unit had announced on Thursday its aim of issuing some new notes.
It plans to list them on the Hong Kong Stock Exchange and has an eligibility letter from the bourse to that effect, it noted on Sunday.
“The company intends to use the net proceeds from the proposed offering for general corporate purposes until business recovers from the effects of the Covid-19 pandemic, and then to facilitate the repayment of a portion of the amounts outstanding under the Wynn Macau credit facilities,” said Sunday’s filing.
As of March 31, the group had secured long-term debt of just over US$2.83 billion under those facilities, the document added.
In a Thursday trading update issued to the Hong Kong bourse, Wynn Macau Ltd said it estimated that in April and May it had lost the equivalent of about US$2 million per day when measured by adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA).
The Macau casino concessionaire said it expected the group’s adjusted property EBITDA to be negative in the range of US$126.1 million to US$118.8 million for the two months ended May 31. That compared to positive adjusted EBITDA of US$215.2 million in the prior-year period.
May 16, 2022A cut of 5 percentage points in the tax levied on Macau gross gaming revenue (GGR “would be equivalent to a 12 to 15 percent boost” to estimated industry earnings before interest, taxation,...
”Any reduction in [Macau gaming] tax would be positive for future profits and cash flows, all else equal”
DS Kim, Amanda Cheng and Livy Lyu
Analysts at brokerage JP Morgan Securities (Asia Pacific)