Fitch affirms ‘BB’ IDR for Wynn Resorts

Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of Wynn Resorts at ‘BB’, with a ‘Stable’ Rating Outlook, according to a press release on Tuesday.

“Fitch's affirmation of WYNN and the Stable Outlook reflect our view that WYNN has a relatively clear glide path to reduce leverage to levels more commensurate with its 'BB' IDR by 2019,” said the ratings agency.

“[By 2019] Wynn Palace will be ramped up and Wynn Boston Harbor will be open a full year.”

Fitch forecasts 2019 consolidated gross leverage at 6.0x and net leverage at 4.5x, declining further to 5.6x and 3.9x by 2020, respectively.

The rating agency also noted it is positive on Wynn’s existing development pipeline, which helps to support the affirmation of the ‘BB’ IDR.

“Once complete, the projects will provide for an operating mix more comparable to WYNN's global gaming peers including Genting Berhad, MGM Resorts, and Las Vegas Sands,” said Fitch.

In addition, Wynn Boston Harbor will provide Wynn with diversification away from Macau and Las Vegas, with Fitch estimating Wynn Boston Harbor will make up 15 percent of Wynn’s property EBITDA by 2019.

In terms of Macau, Fitch believes the new Wynn Palace resort will outperform other casino developments on Cotai, and has attributed $370 million of incremental EBITDA to Wynn Palace, compared to the $100-200 million attributed to competitors' Macau projects.

The forecast assumes that Wynn’s Macau gaming revenue market share increases to 13 percent by 2018, compared to 10 percent in 2010, and Macau’s gross gaming revenue will decline by 5 percent in 2016, and grow 6 percent thereafter, the rating agency noted.

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