Wynn Resorts Announces Private Offering of $800 Million of Wynn Resorts Finance Senior Notes Due 2033

Rhea-AI Summary

Wynn Resorts (NASDAQ: WYNN) has announced a private offering of $800 million in Senior Notes due 2033 through its subsidiaries Wynn Resorts Finance and Wynn Resorts Capital. The notes will be guaranteed by Wynn Resorts Finance's domestic subsidiaries and will rank equally with existing senior unsecured obligations. Proceeds will be used to redeem Wynn Las Vegas' 5.500% Senior Notes due 2025 and for general corporate purposes, including potentially covering a $130 million forfeiture under a non-prosecution agreement. The offering is made to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act.

Positive

• Raising $800 million through senior notes offering
• Refinancing existing debt with potentially more favorable terms
• Strengthening liquidity position for general corporate purposes

Negative

• Increasing long-term debt obligations
• Potential dilution of existing shareholders
• $130 million forfeiture under non-prosecution agreement

Financial Analyst

Wynn Resorts' $800 million senior notes offering is a strategic financial move with significant implications. The company is effectively refinancing its debt, replacing the 5.500% 2025 notes with new 2033 notes. This extends their debt maturity profile, potentially providing more financial flexibility. However, the impact on interest expenses remains unclear without the new notes' interest rate.

The allocation of funds to cover the $130 million forfeiture related to a non-prosecution agreement is noteworthy. This could help Wynn Resorts move past legal issues, potentially improving investor sentiment. The offering's success will depend on market reception and the final interest rate, which will affect the company's future financial obligations.

Legal Expert

The non-prosecution agreement and associated $130 million forfeiture are significant legal developments for Wynn Resorts. While the details aren't provided, such agreements typically involve the company accepting responsibility for wrongdoing without formal charges. This resolution could help Wynn avoid more severe legal consequences, but it's important to monitor any ongoing obligations or reputational impacts.

The private offering structure, utilizing Rule 144A and Regulation S, is a common approach for expedited fundraising. It restricts initial sales to qualified institutional buyers, potentially limiting liquidity but allowing for faster execution compared to a public offering. This approach suggests Wynn is prioritizing speed and flexibility in its financial strategy.

Market Research Analyst

Wynn Resorts' debt refinancing comes at a critical time for the gaming industry. Post-pandemic recovery in Las Vegas has been strong, but Macau operations face ongoing challenges due to China's evolving policies. This offering could provide Wynn with additional financial cushion to navigate these uncertain markets.

Investor focus will likely be on how this offering impacts Wynn's debt-to-EBITDA ratio and overall financial health. The extended maturity to 2033 is positive, but the key will be the interest rate secured. Given recent Fed rate hikes, Wynn may face higher costs compared to their 2025 notes. Market reception to this offering could serve as a barometer for investor confidence in the luxury gaming sector's long-term prospects.

LAS VEGAS--(BUSINESS WIRE)-- Wynn Resorts, Limited (NASDAQ: WYNN) (“Wynn Resorts”) announced today that Wynn Resorts Finance, LLC (“Wynn Resorts Finance”) and its subsidiary Wynn Resorts Capital Corp. (“Wynn Resorts Capital” and, together with Wynn Resorts Finance, the “Issuers”), each an indirect wholly-owned subsidiary of Wynn Resorts, are offering $800 million aggregate principal amount of Senior Notes due 2033 (the “Notes”) in a private offering.

The Notes will initially be jointly and severally guaranteed by all of Wynn Resorts Finance’s domestic subsidiaries (collectively, the “Guarantors”) that guarantee the Issuers’ existing senior secured credit facilities (the “Senior Credit Facilities”), except Wynn Resorts Capital, which is the co-issuer of the Notes, the Issuers’ 5.125% Senior Notes due 2029 (the “2029 WRF Notes”) and the Issuers’ 7.125% Senior Notes due 2031 (the “2031 WRF Notes”). The Notes and guarantees will be senior unsecured obligations of the Issuers and the Guarantors and will rank equal in right of payment with all existing and future liabilities of the Issuers and such Guarantors that are not subordinated, including their obligations under the 2029 WRF Notes and the 2031 WRF Notes, and, with respect to Wynn Las Vegas, LLC (“Wynn Las Vegas”) and certain of its subsidiaries, their obligations under the existing senior notes issued by Wynn Las Vegas. The Notes and guarantees will be effectively subordinated to all of the Issuers’ and the Guarantors’ existing and future secured debt (to the extent of the value of the collateral securing such debt), including the Senior Credit Facilities and the existing senior notes issued by Wynn Las Vegas.

Wynn Resorts Finance plans to (a) contribute and/or lend a portion of the net proceeds from the offering to its subsidiary, Wynn Las Vegas, who will use the amounts to (i) redeem in full Wynn Las Vegas and Wynn Las Vegas Capital Corp.’s outstanding 5.500% Senior Notes due 2025 (the “2025 LV Notes”) and (ii) pay fees and expenses related to the redemption and (b) use the remainder of the net proceeds for general corporate purposes, which may include covering all or a portion of the $130 million forfeiture under the non-prosecution agreement described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 6, 2024.

The Issuers will make the offering pursuant to an exemption under the Securities Act of 1933, as amended (the “Securities Act”). The initial purchasers of the Notes will offer the Notes only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act or outside the United States to certain persons in reliance on Regulation S under the Securities Act. The Notes have not been and will not be registered under the Securities Act or under any state securities laws. Therefore, the Issuers may not offer or sell the Notes within the United States to, or for the account or benefit of, any United States person unless the offer or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes described in this press release, nor shall there be any sale of the Notes in any state or jurisdiction in which such an offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Wynn Las Vegas intends to redeem all of the outstanding 2025 LV Notes on or after the closing of this offering. This press release does not constitute a notice of redemption or an offer to purchase or the solicitation of an offer to sell such notes.

Forward-Looking Statements

This release contains forward-looking statements, including those related to the offering of Notes and whether or not the Issuers will consummate the offering. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those we express in these forward-looking statements, including, but not limited to, reductions in discretionary consumer spending, adverse macroeconomic conditions and their impact on levels of disposable consumer income and wealth, changes in interest rates, inflation, a decline in general economic activity or recession in the U.S. and/or global economies, extensive regulation of our business, pending or future legal proceedings, ability to maintain gaming licenses and concessions, dependence on key employees, general global political conditions, adverse tourism trends, travel disruptions caused by events outside of our control, dependence on a limited number of resorts, competition in the casino/hotel and resort industries, uncertainties over the development and success of new gaming and resort properties, construction and regulatory risks associated with current and future projects (including Wynn Al Marjan Island), cybersecurity risk and our leverage and ability to meet our debt service obligations. Additional information concerning potential factors that could affect Wynn Resorts’ financial results is included in Wynn Resorts’ Annual Report on Form 10-K for the year ended December 31, 2023, as supplemented by Wynn Resorts’ other periodic reports filed with the Securities and Exchange Commission from time to time. Neither Wynn Resorts nor the Issuers are under any obligation to (and expressly disclaim any such obligation to) update or revise their forward-looking statements as a result of new information, future events or otherwise, except as required by law.

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Price Karr

702-770-7555

investorrelations@wynnresorts.com

Source: Wynn Resorts, Limited

FAQ

What is the size and purpose of Wynn Resorts' (WYNN) new senior notes offering?

Wynn Resorts (WYNN) is offering $800 million in Senior Notes due 2033. The proceeds will be used to redeem Wynn Las Vegas' 5.500% Senior Notes due 2025 and for general corporate purposes, including potentially covering a $130 million forfeiture under a non-prosecution agreement.

How will the new senior notes be guaranteed for Wynn Resorts (WYNN)?

The new senior notes will be jointly and severally guaranteed by all of Wynn Resorts Finance's domestic subsidiaries that guarantee the existing senior secured credit facilities, except for Wynn Resorts Capital, which is the co-issuer of the notes.

What is the ranking of the new Wynn Resorts (WYNN) senior notes in terms of payment rights?

The new senior notes and guarantees will rank equal in right of payment with all existing and future liabilities of the issuers and guarantors that are not subordinated, including obligations under the 2029 and 2031 WRF Notes, and Wynn Las Vegas' existing senior notes.

Who are the target investors for Wynn Resorts' (WYNN) new senior notes offering?

The notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act and to certain non-U.S. persons in reliance on Regulation S under the Securities Act.