Moody’s drops Wynn, subsidiaries

Moody's Investors Service said it downgraded Wynn Resorts, Ltd.’s corporate family rating to Ba2 from Ba1 and probability of default rating to Ba2-PD from Ba1-PD.

The agency also lowered Wynn Las Vegas, LLC’s $1.8 billion senior notes due 2025 to Ba3 (LGD5) from Ba2 (LGD5), Wynn Macau Ltd.’s $1.35 billion senior notes due 2021 to Ba3 (LGD5) from Ba2 (LGD5), and Wynn America, LLC’s $375 million revolver due 2019 and $875 million delay-draw term due 2020 to Ba1 (LGD2) from Baa3 (LGD2).

The outlook on all four entities is negative.

Moody’s said the downgrade reflects its view that gaming demand challenges in the Macau, China gaming market – this market accounts for a majority of Wynn's consolidated revenue and EBITDA – will continue and will make it difficult for the company to reduce its consolidated leverage to the level needed to maintain a Ba1 corporate family rating.

Net of excess cash (assumes $500 million of cash is reserved for day-to-day operations), Wynn's consolidated debt/EBITDA was about 6.5 times for the 12-month period ended Sept. 30, 2015.

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