Wynn Macau to issue US$600m in convertible bonds due 2029

The company estimates that the net proceeds of approximately US$586m.

Macau.- Wynn Macau Ltd has announced today (March 3) that it will issue convertible bonds due in 2029, worth US$600m. The company expects to receive around US$586m in net proceeds after accounting for commissions and other related expenses and the funds will be used for general corporate purposes. 

The bonds, which will be issued to professional investors, can be converted into shares at an initial price of HK$10.24 per share. Upon conversion, the bonds will turn into roughly 459.7m shares, which amounts to 8.8 per cent of total issued share capital as of 3 March.

CBRE Securities told Macau Business that Wynn’s move is aimed at bolstering its balance sheet in Macau. The funds could be used to repay the US$600m of 4.875 per cent notes due in 2024. This would reduce the annual interest expense and extend the maturity by five years in exchange for a potential equity issuance of up to 40 per cent. 

JP Morgan analysts said the convert premium and 2029 maturity provide enough buffer and that the convertible bonds appear to be an economical way to enhance the balance sheet.

Wynn Macau has recently reported that its operating revenue for 2022 decreased by 52.2 per cent on year-on-year terms to MOP6.37bn (US$787.5m). Operating revenues decreased by US$473.75m at Wynn Palace and US$314.8m at Wynn Macau due to decreased gaming volumes resulting from travel restrictions related to the Covid-19 pandemic.

The company had US$3.65bn in cash and cash equivalents, excluding restricted cash, as of December 31, 2022, and US$837m in borrowing capacity.