\n Posted on: November 27, 2024, 04:20h.\u00a0\n <\/p>\n
\n Last updated on: November 27, 2024, 04:20h.\n <\/p>\n
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<\/div>\n<\/p><\/div>\n<\/p><\/div>\nWynn Resorts\u2019 (NASDAQ: WYNN) finance unit saw its credit outlook upgraded to \u201cpositive\u201d from \u201cstable\u201d by Moody\u2019s Investors Service. The research firm maintained a \u201cB1\u201d rating on Wynn\u2019s debt \u2014 four notches into junk territory.<\/p>\n Moody\u2019s cited the ongoing recovery in Macau as well as strength at Wynn\u2019s Las Vegas casinos and Encore Boston Harbor as among the reasons for the upgrade. Third-quarter results for Macau operators<\/a>, including Wynn Macau, were tepid, but gross gaming revenue (GGR) in the Chinese territory has improved mightily since the start of the coronavirus pandemic and that trend is expected to continue in 2025.<\/p>\n The rating affirmation and positive outlook reflect our projection of improved leverage for Wynn in the mid 5x debt\/earnings before interest, taxes, depreciation, and amortization (EBITDA) range for 2024, as Macau\u2019s gaming market has recovered significantly and continued strong performance at the company\u2019s Las Vegas and Encore Boston Harbor properties have supported revenue and EBITDA growth,\u201d observed Moody\u2019s.<\/p>\n<\/blockquote>\n The ratings agency added that Wynn\u2019s improved credit profile is a reflection of \u201cthe quality, popularity, favorable reputation of the company\u2019s resort properties,\u201d which Moody\u2019s says are distinguishing factors.<\/strong><\/p>\n Wynn concluded the September quarter with cash on hand of $1.34 billion and debt of $11.79 billion and its efforts to trim the latter figure are among the reasons for the Moody\u2019s outlook upgrade.<\/p>\n The research firm noted the Las Vegas-based gaming company has worked diligently to pare its debt burden. Such efforts are often viewed favorably by ratings agencies and can have the added benefit of improved credit grades<\/a>, which result in lower financing costs.<\/p>\n<\/div>\n \u201cThe positive outlook also reflects the company\u2019s recent reduction in debt, with nearly $1.2 billion of debt permanently reduced. The positive outlook also incorporates our view that the company will maintain good liquidity, with ample cash balances,\u201d according to Moody\u2019s.<\/p>\n The research firm also noted the positive outlook on Wynn is based on expectations of ongoing EBITDA improvement in Macau as well as broader revenue growth. If realized, those factors should help the operator keep liquidity sturdy while reducing outstanding liabilities.<\/p>\n Wynn\u2019s current portfolio is comprised of two Macau integrated resorts, Wynn and Encore Las Vegas, and Encore Boston Harbor. That\u2019s not much in the way of geographic diversity, which Moody\u2019s noted is a potential credit risk.<\/p>\n The operator\u2019s under construction casino resort in Ras Al Khaimah, United Arab Emirates (UAE) adds geographic diversity. That venue, named Wynn Al Marjan Island, is expected to open in early 2027 and will enjoy a multi-year monopoly in what could eventually become one of the largest gaming markets<\/a> in the world.<\/p>\n As for a potential ratings upgrade, Moody\u2019s says Wynn needs to maintain ample liquidity and continue cutting debt to put an upgrade into play.<\/p>\n \u201cRatings could be upgraded if debt\/EBITDA on a Moody\u2019s adjusted basis is maintained well below 6x. Good liquidity and continued revenue growth with strong positive free cash flow would also be needed for an upgrade,\u201d concluded the ratings agency.<\/strong><\/p>\n<\/div>\n![\"Wynn](\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2024\/10\/960x0-858x572.jpg\")
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Wynn \u2018Positive\u2019 Outlook Has Substance<\/h2>\n
Wynn UAE Casino Could Help<\/h2>\n