Wynn Macau Proposes New Series of Senior Notes, Releases Q2 Preliminary Results

Wynn Resorts is considering issuing a series of senior notes, reveals an 8-K filing by the gaming and hospitality operator to the US Securities and Exchange Commission (SEC) Thursday. As per the information submitted, Wynn Macau is proposing to conduct an offering of the Notes to Professional Investors, with its completion subject to market conditions and investor interest.

Wynn Seeks More Debt to Withstand Uncertainty

The proposal at this time does not include the aggregate amount, terms and conditions of the notes, and pricing of the notes will be determined through a book building exercise that will be conducted by the Sole Global Coordinator, Deutsche Bank AG, Singapore Branch, as well as the Joint Bookrunners, a group of investment banks and financial institutions, BofA Securities Inc, BNP Paribas and JP Morgan Securities Plc among them.

Wynn Macau informed the Hong Kong Exchange (HKEX) that if the Notes materialize, the company would use the net proceeds from the sale for general corporate purposes until its business recovers from the negative effects of the coronavirus. As part of the book building exercise, Wynn provided investors with a business update, including its second quarter preliminary results.

The second quarter will be very much dominated by the impact of the coronavirus, Wynn Resorts outlined, pointing out the recent announcement by the Macau Government that monthly gross gaming revenues in April sank by 96.8% and total visitor number from mainland China was down 99.6%, compared to April 2019.

Casinos Stifling Under Travel Restrictions and Uncertainty

Wynn Resorts expects total Macau operating revenues for the two months ending May 31 to be in the range between $17.9 million to $19 million, a mere 2.5% of the $759.7 million for the same months in 2019. Regarding Adjusted Property EBITDA, the number for April and May 2020 is expected in the range of $126.1 million to $118.8 million, compared to $215.2 million for the two months in 2019.

Adjusted Property EBITDA daily loss for the period will be approximately $2 million, $3.5 million daily gain in 2019, on a monthly basis Adjusted Property EBITDA loss will be around $61.2 million, compared to $107.6 million gain the year before.

Wynn Resorts explained the significant drop in revenues with the forced 15-day closure of its Macau properties in February and the subsequent travel restrictions ever since, that have not until recently begun to ease. Guangdong Province has eased quarantine requirements for travelers between the province and adjacent Macau, and even certain groups of people are now allowed to visit Macau from the nearby city of Zhuhai.

Travel from Hong Kong will be restricted with quarantine requirements until July 7, at least, but the operator was unable to determine when restrictions from other Chinese provinces and cities will be lifted, and whether measures will not be reintroduced in case of adverse developments with the virus infection.