Macau gaming operator Wynn Macau has reduced its average cost of debt to 5 percent as of June 30th, 2025, down from 5.5 percent as of March 31st, 2025.
This improvement primarily stems from lower Hong Kong Interbank Offered Rate (HIBOR) levels in the second quarter of 2025, which reduced the average borrowing cost on its revolving credit facility (RCF) to 3.38 percent from 5.76 percent over the same period. According to an investment memo from CreditSights, a financial services provider under the Fitch Group, this development supports the company’s strategies to manage upcoming debt maturities and potentially reduce leverage.
The memo notes that $903 million of the $1.14 billion drawn on the RCF is HIBOR-based, driving the cost savings. Approximately 80 percent of Wynn Macau’s total debt is fixed-rate, providing stability amid fluctuating interest rates. With an unrestricted cash balance of approximately $1.5 billion, the company is well-positioned to address its $1 billion 5.5 percent WYNMAC 2026 bond, due January 2026. Liquidity is further strengthened by $351 million in available RCF as of June 30th, 2025, with an additional $1 billion increase in borrowing capacity on July 31st, 2025, raising the total undrawn RCF to $1.35 billion.
CreditSights analysts suggest that drawing on the upsized RCF could be a cost-effective option for refinancing the upcoming bond, given its lower cost of approximately 3.38 percent compared to yields on Wynn Macau’s dollar bonds, which range from 5.6 percent to 6 percent. Alternatively, a combination of bond refinancing and repayment, leveraging the company’s ample cash reserves, could help Wynn Macau actively lower its leverage levels.
Financially, the memo estimates that Wynn Macau generated approximately $128 million in free cash flow (FCF) in the second quarter of 2025, based on quarterly capital expenditures (CAPEX) of approximately $70 million and interest expenses of around $56 million. This resulted in an EBITDAR-to-interest coverage ratio of 4.5 times for the quarter. The company has projected an additional $135 million to $215 million in CAPEX for the second half of 2025, following $135 million in the first half. Full-year CAPEX is expected to range from $200 million to $250 million for projects and $70 million to $80 million for maintenance.
Non-casino revenues declined 11 percent year-over-year to $142 million, primarily due to a 23 percent drop in room revenues. Average daily rates (ADRs) at Wynn Palace and Wynn Macau properties fell 27 percent and 9 percent, respectively, though occupancy rates remained robust at 98.7 percent and 99.4 percent.
Consequently, Wynn Macau’s market share decreased to approximately 11.9 percent in the second quarter of 2025, down from 12.3 percent in the first quarter and 12.6 percent in the same period of 2024.
