Wynn Macau, Limited, announced that it has received a US $ 500 million loan from its parent company, Wynn Resorts.
The loan facility has a maturity date of 24 months from the contract date of June 24, and the interest rate on the loan is 4% annually.
Wynn Macau believed that the loan would highlight “confidence in Macau’s long-term growth potential” and further strengthen its financial position.
At the same time, Wynn Resorts believed that the loan would help support potential future working capital and other funding needs during Wynn Macau’s term.
The dispatch by securities firm Morgan Stanley argued that the loan showed a decline in liquidity in Macau’s gaming sector, which could imply a business that had difficulty borrowing from banks.
‘Wynn Macau’s bond yield is 12%. Bond yields for most other Macau operators are also around 10%, which makes bond funding expensive. Sands China and SJM expect to announce a similar arrangement soon, unless SJM can complete the refinancing soon. “
Morgan Stanley also forecasts total game revenue of US $ 1.1 billion in the second quarter. This is the third quarter since 2020 and is only 12% of the total reported during the pre-pandemic period of 2019.
According to investment banks, the loan could support Wynn Macau for seven months at a cashburn rate of approximately $ 2 million per day, similar to that reported in the second quarter of this year.
