Wynn Resorts could reduce leverage to 5x after UAE resort opens
Business1 min read
Wynn Resorts could lower its lease-adjusted leverage to 5x after its Wynn Al Marjan Island resort in the UAE opens, CBRE Credit Research analysts said. They said the project could support a credit-rating upgrade, while noting that Wynn holds a 40% equity stake; the resort is due to open in September 2027.
Wynn’s upcoming UAE casino hotel could help bring its lease-adjusted leverage down to 5x, according to CBRE Credit Research analysts Colin Mansfield and Connor Parks.
Moody’s has a 6x leverage qualifier on Wynn, and reaching that level could make the company a candidate for an upgrade, the analysts said. Fitch and S&P Global Ratings have 5x leverage triggers on Wynn, with upgrades potentially available if the UAE casino succeeds after opening.
Wynn’s ratings are BB- at Fitch Ratings and S&P Global Ratings and B1 at Moody’s Investors Service. Each rating is below investment grade, which means the company must pay higher interest when issuing debt. From BB-, Wynn Resorts would need three upgrades to attain BBB-, the lowest investment-grade rating.
CBRE said lenders’ claims would be limited to the resort rather than Wynn Resorts as a whole if the project became a credit default risk. The analysts said they expect investors to include the resort’s cash inflows in Wynn’s EBITDA without consolidating project-level debt, which is non-recourse, and said the project is essentially majority owned by the government.