CreditSights maintains tactical outperform view on Wynn Macau bonds

CreditSights Inc kept its tactical outperform recommendation on Wynn Macau Ltd’s U.S. dollar bonds, despite softer third-quarter earnings and an expected rise in 2027 capital spending. Analysts Nicholas Chen and David Bussey considered the bonds attractive: they traded, on average, circa 58 basis points wider than U.S. BB- corporate bonds of similar maturities.

Free cash flow declined from a year earlier but remained positive at circa US$105.5 million for the quarter, CreditSights observed. The analysts saw little prospect of a material near-term debt reduction, expecting higher EBITDAR to drive most of any improvement in leverage. They projected that free cash flow would stay positive in the fourth quarter of 2026.

Wynn Macau Ltd’s 2027 and 2028 maturities traded about 14 basis points tighter than Melco Resorts & Entertainment Ltd’s 2028 maturities, within the historical spread differential between the credits, CreditSights analysts said. The analysts noted that Wynn Macau Ltd currently faced no buyout overhang. At MGM China, however, they saw lingering event risk because its U.S. parent, MGM Resorts International, remained open to a change-of-control transaction.

An expected increase in capital spending from financial year 2027 was Wynn Macau Ltd’s principal headwind, CreditSights analysts said. They expected expansion projects at Wynn Palace, including a hotel tower, entertainment centre and theatre, to affect the company’s free cash flow. The casino group had previously described The Enclave hotel tower as a US$950-million project with 432 suites, likely to open in early 2029. The company runs Wynn Palace in Cotai and Wynn Macau on the city’s peninsula.