CBRE: Wynn Al Marjan Island could improve Wynn Resorts’ credit rating

CBRE forecasts Wynn’s lease-adjusted leverage could fall to about 5.0x in 2027, potentially opening the door to credit rating upgrades.

Key takeaways:

• Wynn Al Marjan Island is scheduled to open in September 2027.
• CBRE forecasts Wynn’s lease-adjusted leverage could fall to approximately 5.0x in 2027.
• CBRE estimates that Wynn could achieve 0.6x of deleveraging even under a more conservative debt calculation.
• The projected improvement could make Wynn a candidate for credit rating upgrades.

UAE.- Wynn Resorts could secure lower debt leverage and better credit rating prospects once Wynn Al Marjan Island opens in September 2027, according to CBRE Credit Research. In a research note published on Monday, November 9, Colin Mansfield and Connor Parks, analysts at the firm, forecast that Wynn’s lease-adjusted leverage could fall to approximately 5.0x in 2027, once the US$5.7bn integrated resort starts contributing to the company’s cash flow.

The forecast represents a reduction of more than 1.0x from CBRE’s 2026 estimate, pointing to a stronger balance sheet after the resort opens. The improvement is expected to come partly from the way the UAE development is financed. Wynn Resorts holds a 40 per cent interest in the project, alongside joint venture partners Marjan and RAK Hospitality Holding.

Wynn Al Marjan Island has a separate US$2.4bn secured term loan facility arranged through a subsidiary of Island 3 AMI FZ-LLC, the joint venture vehicle. CBRE expects most investors to include Wynn’s share of the resort’s earnings in its EBITDA and cash flow calculations without adding the project-level borrowing to the parent company’s consolidated leverage.

The analysts consider this treatment reasonable given the project’s financing arrangements and majority government ownership. However, they acknowledged that investors could take a more conservative approach by accounting for Wynn’s proportional share of both the debt and earnings.

Even under that scenario, CBRE estimates that Wynn would achieve approximately 0.6x of deleveraging after the resort opens. The analysts therefore expect the development to improve the company’s credit position regardless of how investors account for its debt.

Wynn’s latest regulatory filing provides further details of the financing. The company confirmed that it is not a direct party to the US$2.4bn loan agreement but, alongside the Ras Al Khaimah government, has provided a completion guarantee to lenders. The guarantee will expire once the resort reaches practical completion or the secured liabilities have been repaid.

CBRE said the expected reduction in leverage could also put Wynn in a position to secure credit rating upgrades from Moody’s, S&P Global Ratings and Fitch Ratings. The agencies’ current upgrade thresholds are:

• Moody’s: 6.0x leverage, subject to Wynn generating strong positive free cash flow.
• S&P Global Ratings: 5.0x leverage. Current rating: BB- (below investment grade).
• Fitch Ratings: 5.0x leverage. Current rating: BB- (below investment grade).

The analysts described Wynn as a potential upgrade candidate at Moody’s following the resort’s opening. They also expect the company to enter an extended period of lower leverage and stronger free cash flow, without significant development capital expenditure on the horizon. The potential improvement in Wynn’s credit standing could reduce its borrowing costs and give the operator greater financial flexibility to pursue future developments.

Frequently asked questions (FAQs)

• When will Wynn Al Marjan Island open? The resort is scheduled to open in September 2027.
• How much is Wynn Al Marjan Island worth? It is a US$5.7bn integrated resort in Ras Al Khaimah, in which Wynn Resorts holds a 40 per cent interest alongside Marjan and RAK Hospitality Holding.
• How could the resort affect Wynn Resorts’ leverage? CBRE forecasts Wynn’s lease-adjusted leverage could fall to approximately 5.0x in 2027, more than 1.0x below its 2026 estimate.
• What credit ratings does Wynn Resorts currently hold? S&P Global Ratings and Fitch Ratings currently assign Wynn a below-investment-grade rating of BB-.