In exchange for a 90-basis-point increase in the interest rate on its senior secured facility to LIBOR plus 260 basis points, lenders waived leverage covenants until June 2011 and extended until July 2013 the maturity date on $610 million of its remaining $697 million of revolving commitments. The amendment also increases leverage thresholds after the waiver expires and provides additional flexibility with respect to Wynn Las Vegas' interest coverage ratios.
Led by billionaire Steve Wynn, Wynn Resorts owns and operates Wynn Las Vegas, Encore (next to Wynn Las Vegas), and Wynn Macau. The company has approximately $1.3 billion of available cash and approximately $4.5 billion of total long-term debt. No debt is due this year and the company is said to be working on raising funds to pay off the remaining $375 million of debt set to mature in 2010.
"In general, these are very favorable terms in our view," wrote JPMorgan gaming analyst Joseph Greff in a note to clients. Added Bernstein Research's Janet Brashear, "We believe the new terms give Wynn greater flexibility to manage through the worst down cycle ever experienced by the company."
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