Wynn Resorts Finance has launched an offering for $800 million in unsecured notes due in 2033. The proceeds are expected to help cover ‘all or a portion’ of the $130.13 million record fine imposed on the company over unlicensed money-transmitting business.
The non-prosecution agreement linked to the fine is the largest penalty ever for a Nevada gaming company by the Department of Justice and pertains to ‘various transactions at Wynn Las Vegas relating to certain patrons who reside or operate in foreign jurisdictions which were facilitated by former employees, agents and other third parties that were unlicensed money transmitting businesses’.
Regarding the expenditure, analysts at CBRE note that they are ‘not overly concerned with the announcement given it signals a resolution of the issue, is a manageable cash outflow, and highlights WYNN’s cooperation’.
The group furthers that ‘similar fines against other casino operators (albeit smaller) have not had long-term impacts on their businesses or credit profiles’, highlighting a Venetian Las Vegas case from 2013 regarding $47 million related to ‘receiving money under suspicious circumstances’.
The $800 million is also expected to refinance some $600 million for Wynn Las Vegas and Wynn Las Vegas Capital Corp’s 5.5 percent Senior Notes due in 2025.
CBRE indicates that ‘the refinancing […] is not a surprise given the current capital markets environment and as the company has been actively collapsing this box’.
Furthermore, the analysts note that some $880 million in Wynn Las Vegas 5.25 percent notes due in 2027 ‘will remain at the subsidiary level despite language existing that would allow it to be collapsed in WYNFIN (Wynn Resorts Finance)’.
CBRE continues to rate Wynn Resorts Finance unsecured notes as ‘Market Perform’, ‘in-line with the rest of the US capital structure’. The group continues to rate Wynn Macau’s capital structure as ‘Outperform due to relative value and the incremental yield offered compared to the US debt’.
