Wynn Resorts Issues $800M Debt to Repay Bonds and Pay DOJ
Wynn has announced the pricing of $800 million in senior notes due in 2033 with an interest rate of 6.250%.
Wynn to issue £800M debt in order to redeem bonds.
LISTEN TO THIS ARTICLE:Last week, Wynn Resorts announced it had reached a settlement with the US Department of Justice (DOJ). As part of the agreement, the company’s subsidiary, Wynn Las Vegas, will pay $130 million to address alleged financial violations.
Now, Wynn discusses the pricing of $800 million in senior notes due in 2033. These senior notes will be issued by the company’s subsidiaries in a private offering. Wynn also suggested it may use some of the additional funds to redeem Wynn Las Vegas’ 5.500% senior notes, which are due for payment next year, along with related expenses.
Company Plans to Use Proceeds to Pay DOJ Settlement
The company said that part of the net proceeds may be used for general corporate needs, including paying the $130 million DOJ forfeiture announced last week.
The $130 million forfeiture stands as the largest financial penalty ever imposed on a casino company in the United States. As part of the non-prosecution agreement, Wynn Las Vegas acknowledged it had engaged in activities designed to bypass standard financial regulations.
The senior notes will be offered in accordance with exemptions from the Securities Act of 1933. They will not be made available to the general public, instead being offered only to qualified institutional investors under Rule 144A in the US, or to international buyers who meet certain criteria.
Wynn Resorts Finance plans to (a) contribute and/or lend a portion of the net proceeds from the offering to its subsidiary, Wynn Las Vegas, who will use the amounts to (i) redeem in full Wynn Las Vegas and Wynn Las Vegas Capital Corp.’s 5.500% Senior Notes due 2025 and (ii) pay fees and expenses related to the redemption and (b) use the remainder of the net proceeds for general corporate purposes, which may include covering all or a portion of the $130 million forfeiture under the non-prosecution agreement described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 6, 2024.
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Debt as a Financial Strategy
In response to the settlement with the DOJ, Wynn Las Vegas has implemented stricter anti-money laundering procedures. The company had been accused of engaging in illegal practices, such as employing proxy agents to gamble on behalf of others.
Despite the significant settlement and new debt issuance, these actions suggest Wynn Resorts is aiming to put this chapter behind it.
In a comparable move, competitor MGM Resorts recently announced it was increasing its debt sale from $675 million to $850 million. According to MGM, the additional proceeds will be used for corporate purposes and to pay down existing debts.
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