Moody’s Investors Service has upgraded the outlook for Wynn Macau Ltd and its parent companies Wynn Resorts Finance LLC and Wynn Resorts Ltd from negative to stable, citing the expectation that group leverage will continue declining due to the recovery of the Macau gaming market.
In a note, the ratings agency – which also upgraded Wynn Macau’s senior unsecured notes rating to B1 from B2 – said Macau’s gaming market will recover strongly as visitation and gaming revenue rebounds following China’s lifting of its pandemic-related travel restrictions earlier this year.
This will ultimately benefit the whole group, with Wynn Resorts Finance holding a 72.2% stake in the Macau entity.
Moody’s said the group’s stable credit profile is “supported by the quality, popularity and favorable reputation of the company’s resort properties – a factor that continues to distinguish Wynn from other gaming operators – along with the company’s well established and very successful track record of building large, high quality destination resorts. Wynn’s good liquidity and relatively low cost of debt capital also support the ratings.”
In affirming the B1 Corporate Family Rating of Wynn Resorts Finance, the agency explained that this incorporates the expectation that Wynn Macau’s operations “will continue to recover, reducing leverage levels closer to pre-pandemic levels.”
Moody’s did, however, point to the group’s considerable reliance on Macau and planned substantial investment into new markets such as the UAE, where it is currently developing a large-scale integrated resort.
“Wynn’s revenue and cash flow will remain heavily concentrated in the Macau gaming market,” it said. “Moody’s also expects that Wynn will be presented with and pursue other large, high profile, integrated resort development opportunities around the world, such as its development in the United Arab Emirates. As a result, there will likely be periods where the company’s leverage increases due to partially debt-financed, future development projects.”
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