Wynn Resorts has seen its stake in Macau casino concessionaire Wynn Macau Ltd fall by more than 5% after the latter this week completed the issue of US$600 million 4.50% convertible bonds due 2029.
According to details filed with the Hong Kong Stock Exchange on Tuesday, Wynn Resorts’ shareholding has fallen by 5.8% in total, from 71.6% prior to the bonds issue to 65.8% upon completion. Likewise, The Capital Group Companies, Inc has seen its shareholding fall from 5.7% to 5.2% and other shareholders from 22.7% to 20.9%. Holders of the newly issued bonds now have a combined 8.1% stake in Wynn Macau.
Tuesday’s filing also confirmed that net proceeds from the exercise were around US$586 million with Wynn Macau stating it will use those proceeds for “general corporate purposes”. CBRE Equity Research analyst John DeCree stated last week that he expects the bonds will likely be used to repay the company’s US$600 million of 4.875% notes due 2024, which would “effectively reduce annual interest expense and kick out the maturity five years in exchange for a potential equity issuance up 40%.”
The bonds issue comes with Wynn Macau enjoying a long-awaited recovery following three years of depressed gaming revenues. In announcing the exercise last week, Wynn Macau revealed that the four-week period since Chinese New Year had seen mass market table drop recover to 82% of corresponding 2019 levels and direct VIP turnover to 120%.
As a result, group-wide revenues for January and February combined are expected to have reached between US$391 million and US$395 million while Adjusted EBITDA is estimated at between US$94 million and US$98 million – up from just US$4.5 million in January and February 2022.
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