Fitch Ratings analysts issued a BB- rating to Wynn Resorts and affiliated entities today. Similar ratings were placed on Wynn’s debt and the company was deemed “stable.”
Wrote Fitch, “The ratings reflect the high-quality portfolio of its gaming assets, the expected improvement in Macau’s gaming market in terms of visitation, and gaming activity expected to drive further improvement in credit metrics, strong results in Las Vegas, and robust liquidity that should fund near-term capital projects and could lead to further debt reduction.”
Fitch’s overall optimism was spurred in part by the faster-than-expected Macanese recovery from the pandemic. It was also buoyed by a “healthy” Las Vegas market and strength in Wynn’s liquidity profile.
On the subject of Macau, Fitch estimated that the enclave was seeing premium baccarat play that was back to pre-pandemic altitudes. Mass-market baccarat lagged somewhat at 91 percent of 2019 volume, but was accelerating past that benchmark at year’s end.
All of this has been accomplished in spite of visitation and airlift capacity that are behind pre-COVID numbers. Fitch analysts wrote that “the rebound in those metrics should provide another source of further revenue growth over the near term.”
Wynn Palace, the newer of the company’s properties in Macau, was said to be well on the rebound, as cash-flow margins and mass-market revenue exceeded 2019 amounts. Less traction was found at older Wynn Macau. This, Fitch implied, was caused by a shift in the marketing emphasis from VIP to premium-mass players.
Wynn’s two Las Vegas Strip casinos were seen to be enjoying post-pandemic rebounds of their own. “The high-quality nature of the properties, combined with its favorable reputation, attract a more affluent customer, which allows the company to charge at a higher price point without affecting occupancy,” explained the analysts.
They added that there were fears gambling revenues could recede in 2024-2025, as pent-up demand from the COVID years fades. That said, any decline in bread-and-butter play could be offset by stronger convention business and as visitation driven by must-see Las Vegas attractions. Wynn was noted to be a particular foot-traffic beneficiary of the nearby Sphere.
The company still has multiple irons in the fire, including an Encore Boston Harbor expansion that is expected to continue into 2026. In Macau, Wynn has promised to spend $1.2 billion on additional resort infrastructure and another $1 billion on non-gambling attractions.
These could be overshadowed in the near term by a casino-resort development on Ras Al Khaimah in the United Arab Emirates. On a more modest scale, hotel rooms at Wynn Las Vegas and Encore Las Vegas are slated for a makeover this year and next.
Fitch didn’t think Wynn would risk its liquidity on imprudent projects. “The company has high-quality assets and operates in attractive regulatory regimes, while typically maintaining strong liquidity,” read the report. It noted that Wynn has always maintained a BB- rating, except in times of serious adversity, such as COVID or the Great Recession.
Two casino companies with even higher bond ratings are Las Vegas Sands (BB+/Positive) and the Seminole Tribe of Florida (BBB/Stable). The former was said to have benefited from a lower leverage than Wynn’s and its exposure to Singapore, where travel restrictions have been markedly less severe than in Macau. The Seminoles were lauded for low leverage, “stronger credit metrics,” and predominance in the lucrative Florida market.
Wynn management, the analysts concluded, does not have “an explicit policy” regarding leverage, being willing to increase it to fund capital-intensive projects. Despite a share repurchase in 2023, Fitch’s number-crunchers were of the opinion that future buybacks would be “opportunistic” and that “the dividend program will be the cornerstone of capital return to shareholders.”
