Wynn Resorts has earned its first BB- issuer default rating (IDR), as well as a “stable outlook” assessment from Fitch Ratings, according to a statement released by the credit rating agency.
According to Fitch, ‘BB’ ratings mean that the entity in question has a higher default risk, especially in an economically unstable environment. However, the bond-issuer is able to meet its commitment thanks to its “business or financial flexibility.”
Fitch stated that the credit grading and stable outlook assessment was given due to “the high-quality portfolio of [Wynn’s] gaming assets,” the better-than-expected recovery of Macao’s gaming industry, Las Vegas’s “strong results” and a possible reduction of debt as a result of “near term capital projects” funded by “robust liquidity.”
In its statement, the agency reported that Wynn’s gaming revenue had recovered considerably following the dismantling of pandemic restrictions.
[See more: Losses shrink for Wynn Resorts in the third quarter]
It also pointed out that the figure for mass market baccarat was closing in on 2019 levels, with last year’s total representing a recovery of 91 percent.
Fitch acknowledged that while Macao’s visitor numbers and airport traffic still fall short of 2019 figures, they were expected to increase this year, which would help raise Wynn’s revenue in the near future.
Wynn is also expected to have a positive cash flow during the forecast period, with US$2.8 billion of cash on hand, US$792 million worth of short-term investments and access to US$737 million via a revolving credit line.
During the third quarter of 2023, Wynn Resorts’s operating revenues totaled US$1.67 billion, with its Macao operations earning US$819.8 million. The company is expected to make its fourth quarter 2023 earnings available on 7 February.
