Wynn Macau Ltd says it expects to raise around US$743.1 million to assist in navigating the COVID-19 pandemic after entering into a purchase agreement with Deutsche Bank AG, Singapore Branch to issue US$750 million of 5.500% senior notes due 2026.
Proceeds from the offering, which is restricted to qualified institutional investors outside the United States, will be used for “general corporate purposes until business recovers from the effects of the COVID-19 pandemic, and then to facilitate the repayment of a portion of the amounts outstanding under the Wynn Macau Credit Facilities,” Wynn Macau said.
Details of the offering come after the company revealed late last week that it expects to record an Adjusted EBITDA loss for the months of April and May 2020 of between US$126.1 million and US$118.8 million due to the impact of border restrictions put in place in March to prevent the spread of COVID-19. The expected loss compares with Adjusted EBITDA of US$215.2 million for the same period in 2019 and represents a year-on-year decline of approximately 157%.
According to Wynn Macau, none of its controlling shareholders are parties to the purchase agreement or indenture, however the indenture between the company and Deutsche Bank Trust Company Americas will include a provision requiring Wynn Macau to repurchase the notes at 101% of the principal amount plus interest should there be any change of control.
Circumstances constituting a change of control would include, among others, any company other than Wynn Resorts Ltd taking ownership of more than 50% of issued share capital in Wynn Macau, or the first day on which Wynn Macau ceased to own at least 60% of Macau gaming concession holder Wynn Resorts (Macau) S.A.
Wynn Macau has been put forward by some industry analysts and commentators as a possible target for acquisition ever since its founder, Steve Wynn, stepped down as Chairman and CEO in February 2018. Talk of such an acquisition was further fueled last month when Las Vegas Sands Chairman and CEO Sheldon Adelson stated his company was on the lookout for M&A opportunities across Asia.
Galaxy Entertainment Group already owns a 4.99% stake in Wynn Macau’s parent company, Wynn Resorts Ltd, purchased shortly after Steve Wynn’s departure in March 2018 for US$927.5 million.