The gambling market in Macau has been in a rut most of this year. Revenues in almost all operations have been flat.
As a result, Wynn Macau, the Asian Subsidiary of Wynn Resort, is experiencing the same issue as well and has decided to seek the help of investors. The firm has issued a notice to the effect that it is planning to place nearly one billion in senior notes on the exchange market.
The firm experienced a $3.5 million loss in its third-quarter, as stated in calvinayre, mostly thanks to its engagement with VIPs. The notes the firm has placed on the exchange market comes at 5.125 percent and will be due in 2029. If everything goes as planned, the firm will have made more than $991 million from this campaign.
During this filing, the firm stated that it conducted an offering on the senior notes to a group of professional investors on the 10th of December. Wynn Macau intends to use the proceeds of this campaign to carry out the repayment of money the firm has outstanding under the Wynn Macau Ltd credit facilities and for other corporate purposes as well.
The firm’s sales event was presented before the exchange of the 9th of December; however, specifics, such as principals, conditions as well as other issues had not been ironed out. The current filing is meant to iron out issues and set the record straight.
The firm also added that its board of directors feels there will be a lot of benefit in carrying out the proposed issuance of senior notes and using the money collected for the intended reasons as this would lead to a reduction in the firm’s indebtedness.
In slightly over two years, the firm, as will be the case with other casinos within Macau, will be seeking fresh concessions in the gambling market. Due to the firm’s timing of its offer, as well as the impending expiration, the senior notes come with a caveat that provides buyers with the opportunity to ask the firm to buy back the senior notes; under some unique circumstances, in full or in part for cash, equal to 100 percent of the principal value as well as unpaid and accrued interest, where possible, excluding the repurchase date.
The firm, in its previous statements, has said that it is expecting revenues to go up by 22 percent in the next two years. Nevertheless, this is going to be a tough goal for the firm to realize. Based on a report by local media, gambling revenues in Macau are shifting immensely. Although the gambling seen saw a 14 percent raise last year, 2019 is expected to experience a drop of about 3 percent or more. Next year might not be any better, but the fir is likely to see a 3 percent increase by the end of 2020.
As David Bonnet states, all the available options have been explored, and now Macau is starting to look like other mature gambling markets like Atlantic City and Las Vegas.