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Moody's rates Wynn Resorts loan Ba3
Moody's Investors Service said it assigned a Ba3 rating to Wynn Resorts, Ltd.'s $400 million six-year term loan B.
Moody's also said it affirmed Wynn's Ba3 corporate family rating, Ba3-PD probability of default rating, along with the company's subsidiary issuers Ba2 senior secured debt and B1 senior unsecured debt ratings and SGL-1 speculative grade liquidity rating.
The outlook remains negative.
The proceeds from proposed term loan can be used for general corporate purposes, including capital expenditures, share repurchases and investments in subsidiaries.
The rating assigned to the company's term loan B considers that despite its structural subordination to Wynn's primary operating subsidiaries – Wynn America, LLC, Wynn Las Vegas, LLC and Wynn Macau, Ltd., each of which has its own credit structure – the term loan B is secured by an equity interest in the intermediate holding companies that own these operating subsidiaries, Moody's said.
The management and license fees paid to Wynn Resorts from these operating subsidiaries will be the primary source of cash flow that will service the $400 million term loan B, the agency said.
The ratings are supported by the quality, popularity and favorable reputation of the company's resort properties, a factor that continues to distinguish it from most other gaming operators, Moody's said.
The ratings also consider the favorable prospects for the company's resort in Everett, Mass., a suburb near Boston that will improve the company's geographic diversification, the agency added.
Credit concerns include Wynn's limited diversification despite the fact that it is one of the largest U.S. gaming operators in terms of revenue, Moody's said.
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