Wynn Macau Ltd is expecting to raise some $743.1 million after it entered into a purchase agreement with Deutsche Bank – through its Singapore branch – which will be the “initial purchasers” of company notes to support the loan.
The gaming operator earlier submitted a filing to the Hong Kong Stock Exchange, which outlined that the senior notes will mature in 2026 and carry an interest rate of 5.5%.
Moody’s Investors Service Inc. has given a ‘B1’ rating to Wynn Macau Ltd’s $750-million in senior unsecured notes.
“The additional liquidity is beneficial to improve flexibility to manage in the current weak operating environment [which has led to] reduced visitation levels, but the incremental debt is a credit negative increase in leverage to help further cover the company’s current cash burn,” the rating agency said.
“Although there is an initial increase in leverage on a gross basis, the transaction enables the company to reduce the secured debt in its capital structure once business conditions improve,” Moody’s added.
Wynn Macau said in a filing that 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.
It would also “facilitate the repayment of a portion of the amounts outstanding under the Wynn Macau credit facilities.”
MGM China Holdings is also considering extending an offer of $500 million in senior notes in order to give it more liquidity.
According to reports, Bank of America Securities will coordinate the effort, as well as participate in the purchase of the notes. Moody’s gave the offering a rating of “Ba3”.
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