Wynn Macau Ltd has announced plans to conduct an additional notes offering to institutional investors, its second in as many months after raising close to US$750 million via a similar offering in June.
While Wynn had not yet determined the principal amount of the offering in a filing with the Hong Kong Stock Exchange overnight, it did say the proceeds would be used to repay the company’s HK$17.88 billion (US$2.3 billion) senior term loan facility and HK$5.82 billion (US$750 million) senior revolving credit facilities extended in 2015 and 2018 respectively.
The additional offering would be consolidated to form a single series with the US$750 million 5.500% senior notes due 2026 issued in June.
News of Wynn Macau Ltd’s latest liquidity-boosting measures comes after the company announced a 98.2% decrease in operating revenues at its Macau integrated resorts – Wynn Palace and Wynn Macau – to just US$20.6 million in the three months to 30 June 2020 due to the impact of COVID-19 on visitation.
The results included a combined Adjusted EBITDA loss of US$193.5 million and, remarkably, a loss on casino play for the quarter of US$15 million – an essentially unheard of occurrence in the current era of multi-billion dollar large-scale IRs.
In announcing its additional offering overnight, Wynn Macau revealed it had managed to further reduce operating costs through the month of July to around HK$15.5 million (US$2 million) per day, compared to HK$23 million (US$3 million) during the fourth quarter of 2019. The company had previously revealed daily operating costs of US$2.5 million in April and May.
Nevertheless, Wynn said it remains confident in its ability to recover from the impact of the COVID-19 pandemic.
“Wynn Palace and Wynn Macau cater to premium VIP and mass market guests, and we believe the recovery in Macau will be driven by the premium guest,” it said.
“For example, in the five-week period following the reopening of our properties on 20 February 2020 (after closing for 15 days due to COVID), gross gaming revenues were approximately 25% of the historical gross gaming revenues run-rate, which was driven primarily by our VIP and premium mass market guests, despite significant travel restrictions.
“We expect to achieve break-even Adjusted EBITDA upon reaching approximately 40% of our historical gross gaming revenues run-rate.”
