{"id":132719,"date":"2020-04-10T10:31:01","date_gmt":"2020-04-10T17:31:01","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=132719"},"modified":"2020-04-10T12:23:02","modified_gmt":"2020-04-10T19:23:02","slug":"wynn-bond-sale-could-be-good-news-for-cash-starved-rivals","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/","title":{"rendered":"Wynn $600 Million Note Sale Indicates Gaming Industry Can Access Cash if Needed"},"content":{"rendered":"

Earlier this week, Wynn Resorts (NASDAQ:WYNN) sold $600 million of corporate notes coming due in 2025 with at an interest rate of 7.75 percent in a private offering, a transaction that was significant for at least two reasons.<\/p>\n

\"Wynn
Wynn Resorts’ recent bond sale could be a big positive for other operators. (Image: Reuters)<\/figcaption><\/figure>\n

First, the offering was upsized from $350 million<\/a>, indicating demand for the notes was robust, even though corporate debt markets are under stress. Second, some analysts view the sale as confirmation that gaming companies can access capital even as the COVID-19 pandemic is forcing temporary property closures around the world, bringing with it a zero-revenue environment for operators.<\/p>\n

This is a significant milestone for the industry, as it represents the availability of capital even in this environment, at least for some issuers,\u201d said Union Gaming analyst John DeCree in a note to clients.<\/p><\/blockquote>\n

The rub is at what terms casino companies will have to issue bonds, should they choose that avenue to raise capital. With the industry under duress caused by the coronavirus outbreak, creditors will likely demand added compensation for what they perceive to be elevated risk. For example, one credit rater graded Wynn’s latest sale at B1, which is deep into junk territory, meaning a higher coupon for investors.<\/strong><\/p>\n

Other Avenues For Cash<\/h2>\n

Over the past month, gaming companies, including Caesars Entertainment Corp. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM) and Wynn, rushed to bring cash onto their balance sheets via bank lines of credit. For its part, the Encore Boston Harbor operator drewdown an $850 million<\/a> revolver to bolster its liquidity position.<\/p>\n

\n

Since March 5, US companies have drawn $215 billion on credit facilities from 382 different lenders, according to S&P Global Market Intelligence. Nearly half of that capital has been drawn by consumer discretionary companies \u2013 the sector in which gaming operators reside. On a standalone basis, casino companies account for 6.7 percent of that $215 billion.<\/p>\n<\/div>\n

With Wynn being successful in its latest bond sales, DeCree says rivals could soon test the waters, too.<\/strong><\/p>\n

\u201cThere will likely be a number of gaming issuers that will need to test the markets in the coming weeks, and we suspect there will be demand at various levels of risk,\u201d said the analyst. \u201cWhile not everyone will be as successful as\u00a0Wynn Resorts, we think it is important to remember that there is real money demand for quality businesses with good assets and proven management teams.\u201d<\/p>\n

Good Timing<\/h2>\n

Wynn Resorts has $3 billion in liquidity, positioning it to survive for 1.4 years should property closures last longer than expected.<\/p>\n

Still, the aforementioned bond offering was well-timed and could serve to calm skittish investors, because the company recently said it’s Wynn Macau arm is still bleeding<\/a> about $2.5 million per day, a sum that doesn’t include $500,000 worth of interest expense.<\/p>\n

\u201cWynn Resorts led the way for the gaming sector\u2026\u00a0with an upsized bond offering, marking the first new issuance for the sector since Covid-19 hit,\u201d said DeCree. \u201cIt doesn\u2019t surprise us that\u00a0Wynn Resorts\u00a0was the first deal out of the gate as a well-known seasoned issuer with a long history of timely and successful capital-markets activity.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Earlier this week, Wynn Resorts (NASDAQ:WYNN) sold $600 million of corporate notes coming due in 2025 with at an interest rate of 7.75 percent in a private offering, a transaction that was significant for at least two reasons. First, the offering was upsized from $350 million, indicating demand for the notes was robust, even though […]<\/p>\n","protected":false},"author":46,"featured_media":132728,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nWynn Bond Sale Could be Good News for Cash-Starved Rivals<\/title>\n<meta name=\"description\" content=\"Wynn Resorts sold $600 million in corporate debt earlier this week and analysts view that as a positive for rivals that need to tap capital markets.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Wynn Bond Sale Could be Good News for Cash-Starved Rivals\" \/>\n<meta property=\"og:description\" content=\"Wynn Resorts sold $600 million in corporate debt earlier this week and analysts view that as a positive for rivals that need to tap capital markets.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-04-10T17:31:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-04-10T19:23:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/wynn-2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"853\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/\",\"url\":\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/\",\"name\":\"Wynn Bond Sale Could be Good News for Cash-Starved Rivals\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/wynn-2.jpg\",\"datePublished\":\"2020-04-10T17:31:01+00:00\",\"dateModified\":\"2020-04-10T19:23:02+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Wynn Resorts sold $600 million in corporate debt earlier this week and analysts view that as a positive for rivals that need to tap capital markets.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/wynn-bond-sale-could-be-good-news-for-cash-starved-rivals\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/wynn-2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/wynn-2.jpg\",\"width\":1280,\"height\":853,\"caption\":\"Wynn Resorts' recent bond sale could be a big positive for other operators. 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