Wynn Just Got a $1.5 Billion Credit Line as Macau Concerns Intensify. Its Stock Is Dropping.
A general view of the Wynn Casino in Macau.
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Wynn Resorts said in a filing it obtained a $1.5 billion credit facility from Bank of China Ltd. as it and other casinos that operate in the Chinese enclave of Macau face tighter government control over the industry.
Wynn (ticker: WYNN) said the credit line will be used to refinance debt of Wynn Macau and its subsidiaries, and also to “fund ongoing working capital needs and for general corporate purposes.”
Earlier this week, Macau authorities announced the “healthy and sustainable development” of the gambling industry through regulatory improvements. Macau also laid out plans to increase local ownership in gaming companies.
Shares of Wynn Resorts and other casino companies with operations in Macau, such as Las Vegas Sands (LVS) and Melco Resorts & Entertainment (MLCO), have fallen sharply this week following the launch of a 45-day consultation on a reform of the territory’s gaming laws.
Also read: Macau’s Review of Casino Operations Sparks a Selloff, and a Buying Opportunity
The tighter restrictions in Macau led analysts at Jefferies to cut the price target of Wynn to a Wall-Street low of $83, down from $104. The analysts maintained their Hold rating on the stock.
Jefferies also reduced its rating on Las Vegas Sands to Hold from Buy and slashed its price target to $40 from $60. The analysts noted “the pending uncertainties around the Macau concession and its growth and return prospects.”
Wynn was off 0.4% in premarket trading Friday to $84.00, while shares of Las Vegas Sands dipped 0.6% to $37.31. Melco was up 1.57%.
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