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Wynn Resorts (NASDAQ:WYNN) now has a lowered its stake in Wynn Macau (OTCPK:WYNMF) after setting up a $600M convertible bond deal.
The casino company is the holder of a 65.8% position in Wynn Macau after previously having a stake of 71.6%.
Wynn Resorts (WYNN) took in net proceeds of $586M from the convertible bond offering. The funds have been earmarked for general corporate purposes’ and debt repayments. The bondholders now collectively own about 8.1% of Wynn Macau Major investor Capital Group Companies is still in the mix with a 5.2% stake.
CBRE Equity Research analyst John DeCree said the convertible bond deal could reduce annual interest expenses for Wynn Macau and kick out the maturity dates for five years in exchange for the potential equity issuance of up to 40%. “While we believe the recovery in Macau will improve cash flow and valuation over the next 12-24 months, this financing is front-footed amid the volatile global capital markets environment,” he noted.
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