Wynn Resorts expands bond tender offer
Wynn Resorts (NASDAQ: WYNN ) has increased the size of its recently announced tender offer for a portion of its senior notes due 2025.
Earlier this month, the casino operator announced it would buy back $300 million of that debt at an interest rate of 5.5%. This amount increased to $400 million. The total outstanding principal amount of this issuance is US$1.78 billion.
Because the aggregate principal amount of Notes validly tendered and not validly withdrawn on or before the Early Tender Deadline exceeds the Offer Cap (as amended), Notes tendered after the Early Tender Deadline will not be available for purchase and tender principal amounts accepted for purchase of the notes have been allocated pro rata to the tender offer cap (as amended) in accordance with the terms and subject to the terms and conditions of the tender offer," the Las Vegas-based gaming company said in a statement.
As of the end of the second quarter, Wynn had $12.14 billion in outstanding debt and $3.65 billion in cash and cash equivalents.
Why Wynn made an acquisition offer
Wynn launched a tender offer for some of its notes due 2025 as it eliminates some of the operator's high-yield notes. In return, the company saves on interest payments and simplifies its capital structure.
This is important because Wynn is rated a "B+" by Standard & Poor's (S&P), which puts it squarely into junk territory. Offering outstanding debt could benefit Wynn in an environment where interest rates are high and interest in junk bonds from already highly leveraged issuers may be limited.
In May, Standard & Poor's revised Wynn's credit rating outlook to "positive" from "negative", citing the recovery in Macau, the operator's largest market.
"We now expect Wynn's leverage to improve to a high of 5x in 2023, about a year earlier than the previous level of around 7x, due to improved cash flow in Macau," the ratings agency noted. "By 2024 , Wynn's debt could increase by about five times, compared to our 6x upgrade threshold, which we believe could provide sufficient cushion to support a higher-notch rating and provide the company with exposure to further large-scale development projects. Flexibility, including Macau, United Arab Emirates and possible anticipated capital expenditures.” "
Wynn Takes Further Steps to Save Money
By canceling a portion of its notes due in 2025, Wynn has reduced its interest expense obligations, which will undoubtedly have a positive impact on the operator's balance sheet.
However, the cost-saving efforts don't stop there. Earlier this month, the company announced it would cease WynnBET operations in eight states and was reviewing operations in Michigan and New York. The operator did not disclose how much money it would save through the move.
Wynn will continue to offer sports betting in Massachusetts and Nevada, where it operates brick-and-mortar casinos.
Read also:
- Games Industry Research: Carbon Emissions of Top Video Games
- U.S. cities with the most Swifties per capita
- Blackjack Casino Advantage: How to Beat the Odds
- Football 101: What is relegation in football?
Source: www.casino.org
