CBRE Credit Research says it is “comfortable” with casino developer and promoter Wynn Resorts Ltd’s near-term investment spending, notwithstanding “robust” capital expenditure (capex) on growth “through 2026”.
That was thanks to Wynn Resorts’ “favourable cash flow position that can sufficiently support these projects without the need for additional financing,” stated CBRE Credit Research analysts Colin Mansfield and Connor Parks, in a Monday update.
The memo came after guidance by Wynn Resorts management in the wake of the group’s fourth-quarter and full-year results issued on February 13.
CBRE Credit Research stated: “Growth capital expenditure through 2026 is robust, with renovations continuing in Las Vegas – Encore tower, upgrades to food and beverage [offers] among other projects –, Wynn Al Marjan Island progressing towards an early 2027 opening, and concession commitments ramping in Macau.”
Wynn Resorts recently announced that it and its partners for the Wynn Al Marjan Island resort project (pictured in an artist’s rendering) in Ras Al Khaimah, in the United Arab Emirates, have secured a US$2.4-billion construction loan facility.
The inflation-adjusted cost of Wynn Al Marjan Island, including land, capitalised interest and fees, was put at US$5.1 billion, in which Wynn Resorts is a 40-percent equity investor. Wynn Resorts is the parent of Macau casino operator Wynn Macau Ltd.
In a fourth-quarter presentation, Wynn Resorts mentioned that its Macau concession-related capital expenditure this year would be in the range of US$250 million to US$300 million. The group operates Wynn Macau and Wynn Palace in the Macau market.
For 2026, the parent estimated Macau capital spend at between US$450 million and US$500 million. The figures cover several concession-related investment projects at Wynn Palace, including a new food hall, plus an event and entertainment centre, as well as a theatre and resident show.
Wynn Macau Ltd’s free operating cash flow is likely to remain positive in fiscal year 2025, and be sufficient to cover the company’s expected incremental capital expenditure within the year. That is according to analysts at CreditSights, a credit research specialist, writing in a Friday memo.
CBRE Credit Research stated in its Monday note, regarding spending in Las Vegas, the UAE, and Macau: “Each project… carries an attractive return on investment, in our opinion, as Wynn [Resorts] furthers its high-end offering in several gaming jurisdictions.”
“We anticipate two years of modestly negative free cash flow – after growth capital expenditure – before becoming materially stronger in 2027,” added CBRE Credit Research.
It forecasts Wynn Resorts’ gross consolidated lease-adjusted leverage to remain in the low- to mid-5 times range through to 2027, noting the group ended 2024 at 5.3 times on a consolidated basis, and 5.8 times on a standalone basis in Macau.
CBRE Credit Research said: “The company is comfortable with current leverage, but we see an opportunity for deleveraging beyond 2026 after Wynn Al Marjan Island opens and heavy capex spending across several jurisdictions winds down.”
Wynn Resorts had noted in its fourth-quarter and full-year results: “We have a substantial amount of consolidated debt in relation to our equity. As of December 31, 2024, we had total outstanding debt of approximately US$10.64 billion.”
Nonetheless, that was 10.0 percent down compared to the just under US$11.83 billion in consolidated debt at year-end 2023, show the company’s data in the results filing.
