Moody’s upgrades outlook on Wynn Macau from ‘negative’ to ‘stable’

Moody’s Investors Service upgraded Wynn Macau Ltd.’s outlook from “negative” to “stable.”

Additionally, the corporation’s senior unsecured note rating was upgraded from “B2” to “B1.” Wynn Macau Ltd. is the company that runs the Wynn Palace resort in Cotai and the Wynn Macau resort on the city’s peninsula. The US-based casino developer Wynn Resorts Ltd. owns all of Wynn Resorts Finance LLC.

Moody’s validated Wynn Resorts Finance’s existing ‘Ba1’ senior secured revolver and term loan ratings, as well as its ‘B1’ corporate family rating. The company’s robust US operations, which have led to a reduction in total debt levels, and its growing Macau activities as the recovery continues have strengthened Wynn Resorts Finance’s outlook to “stable.”

A decrease in total debt levels and a shift in the proportion of secured debt to unsecured debt in the company’s capital structure are indicated by the upgraded senior unsecured notes rating. Moody’s expects the recovery of Macau, along with solid results in Las Vegas and the Encore Boston Harbor hotels, to sustain growth in revenue and earnings while reducing debt.

Moody’s anticipates that the company will have strong cash holdings and robust liquidity, leading to a stable outlook. The Macau casino industry is anticipated to continue to be the primary source of revenue and cash flow for the Wynn group. According to Moody’s, the company plans to pursue further significant, well-known casino resort development opportunities. This might lead to periods of increased leverage since these projects would be debt-financed.

According to Moody’s, Wynn’s gaming income should keep rising in 2024, enabling the business to restore credit metrics that support the ‘B1’ grade. The ratings agency says that in addition to sufficient liquidity, sustained sales growth, and significant positive free cash flow, an upgrade is conceivable provided debt/EBITDA stays below 6.0 times. Moody’s upgraded its assessment of the Macau government to “negative,” although it kept its foreign currency issuer rating at “Aa3,” indicating an extremely low credit risk of default. This rating rise coincides with this update.

Original story by: GGRAsia