CBRE says Wynn Al Marjan Island could cut Wynn leverage to 5.0x
Deals & M&A2 min read
CBRE Credit Research said Wynn Resorts’ planned Wynn Al Marjan Island resort in the UAE could improve the company’s financial position after its scheduled September 2027 opening. CBRE expects lease-adjusted leverage to fall to about 5.0x in 2027, more than 1.0x below its 2026 forecast; even counting Wynn’s proportional share of project debt and EBITDA, it estimates a reduction of about 0.6x.
Wynn Resorts’ finances could strengthen significantly and its credit ratings could be upgraded after the planned September 2027 opening of the $5.7 billion Wynn Al Marjan Island resort in the UAE, according to CBRE Credit Research. The resort is expected to reduce Wynn’s lease-adjusted leverage to around 5.0x in 2027, once it is operating and generating cash flow.
That would be an improvement of more than 1.0x over CBRE’s forecast for 2026, the last full year before Wynn Al Marjan Island is slated to open. Even if Wynn’s proportional share of the project’s debt and EBITDA were included in its financial metrics, the company would still deleverage by approximately 0.6x after the resort opens, CBRE estimated.
The resort is being financed separately through a $2.4bn secured term loan taken out by a subsidiary of Island 3 AMI FZ-LLC, a joint venture between Wynn, Marjan and RAK Hospitality Holding LLC in which Wynn holds 40%. The project debt is non-recourse to Wynn Resorts, generally limiting lenders’ claims to the project and its assets rather than the wider group. CBRE expects most investors to include Wynn’s share of the resort’s cash generation in its earnings and cash flow metrics without adding project debt to consolidated leverage calculations. The analysts said that approach had merit given the sovereign-backed majority ownership, but acknowledged an argument for including some project debt in Wynn’s financial metrics.
CBRE said Wynn could be a candidate for a Moody’s upgrade when the resort opens, noting that Moody’s has a 6.0x leverage trigger for an upgrade, subject to strong positive free cash flow. The analysts said S&P and Fitch each have a 5.0x leverage trigger for an upgrade from the current BB- rating.