Wynn Resorts (NASDAQ:WYNN), Limited has entered into an agreement to issue $800 million in senior notes with a 6.25% interest rate, maturing on March 15, 2033. The company announced the completion of the transaction today, under an indenture with U.S. Bank Trust Company, National Association as trustee.
The newly issued notes by Wynn Resorts Finance, LLC, and Wynn Resorts Capital Corp., both indirect wholly-owned subsidiaries of Wynn Resorts, were sold relying on exemptions from registration requirements. The interest on these notes is payable semi-annually on March 15 and September 15, starting March 15, 2025.
Proceeds from the offering are earmarked for the redemption of existing 5.5% Senior Notes due 2025, covering redemption-related fees and expenses, and for general corporate purposes. The notes are guaranteed by Wynn Resorts Finance's domestic subsidiaries, excluding Wynn Resorts Capital, the co-issuer of the notes.
The company may redeem the notes at any time before September 15, 2027, at 100% of their principal amount plus a make-whole amount and accrued interest. After this date, redemptions can be made at set prices plus accrued interest.
The indenture includes covenants limiting certain activities of the issuers and guarantors, such as entering sale-leaseback transactions, incurring liens, and merging or selling assets, with certain exceptions.
In the event of a change of control, the issuers must offer to repurchase the notes at 101% of the principal plus unpaid interest. The indenture also outlines default events which could lead to the acceleration of payment obligations.
In other recent news, Wynn Resorts has secured $140.5 million in credit amendments, providing additional funding and extending the maturity dates of its loans. The company's recent financial strategy includes a successful private offering of $800 million in senior notes due in 2033, intended for redeeming existing debt and general corporate purposes.
Wynn Resorts also reported a record second-quarter EBITDA of $572 million, contributing to a significant reduction in gross debt by over $1.1 billion. Analyst firms Stifel Financial (NYSE:SF) Corp and Deutsche Bank (ETR:DBKGn) have maintained their Buy ratings on the company's shares, despite adjusting their price targets.
Wynn Resorts, through its subsidiary Wynn Las Vegas, LLC, forfeited $130 million in a non-prosecution agreement with U.S. federal authorities related to an investigation into illegal money transmissions.
The company has also adjusted the conversion price of the convertible bonds issued by its indirect subsidiary, Wynn Macau (OTC:WYNMF), Limited, setting the new price for the 4.50% convertible bonds due 2029 at HK$10.01212.
InvestingPro Insights
As Wynn Resorts, Limited fortifies its financial structure with the recent senior notes issuance, a glance at the real-time data from InvestingPro provides a deeper understanding of the company's financial health. Wynn's market capitalization stands at $8.79 billion, a testament to its significant presence in the industry. The company's impressive gross profit margin, which is a robust 69.02% over the last twelve months as of Q2 2024, underscores its ability to efficiently manage costs relative to its revenue. This financial efficiency is further highlighted by an operating income margin of 17.65% for the same period.
Investors considering Wynn Resorts should note the company's high shareholder yield and the prediction by analysts that the company will be profitable this year, as per InvestingPro Tips. These factors may indicate a strong potential for return on investment. However, it's important to be mindful of the stock's volatility and the recent downward earnings revisions by analysts for the upcoming period. For those seeking a more comprehensive analysis, InvestingPro offers additional insights, with 5 more InvestingPro Tips available for Wynn Resorts at https://www.investing.com/pro/WYNN.
Understanding these metrics and tips can offer investors a clearer picture of Wynn Resorts' financial trajectory following its latest strategic move in the capital market. The fair value estimates by analysts and InvestingPro, at $114 and $93.35 respectively, provide a range for investors to consider when assessing the stock's potential value. With the next earnings date set for November 6, 2024, stakeholders will be keen to see how these strategic financial decisions align with the company's performance.
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