Moody’s Upgrades Wynn Resorts’ Credit Outlook to “Positive” Amid Recovery and Debt Reduction Efforts

Moody’s Investors Service has upgraded the credit outlook for Wynn Resorts’ (NASDAQ: WYNN) finance unit from “stable” to “positive.” While the agency maintained a “B1” rating on Wynn’s debt, which remains four notches into junk territory, the upgrade reflects several encouraging developments, including a significant recovery in Macau and strong performance at the company’s Las Vegas and Boston properties.

Macau’s gaming market has shown considerable improvement since the COVID-19 pandemic, despite tepid third-quarter results for operators like Wynn Macau. Gross gaming revenue (GGR) in the region has rebounded substantially and is projected to continue growing through 2025. Moody’s highlighted this recovery as a key factor in its outlook revision.

“The rating affirmation and positive outlook reflect our projection of improved leverage for Wynn in the mid 5x debt/earnings before interest, taxes, depreciation, and amortization (EBITDA) range for 2024, as Macau’s gaming market has recovered significantly and continued strong performance at the company’s Las Vegas and Encore Boston Harbor properties have supported revenue and EBITDA growth,” the firm noted.

Moody’s attributed the company’s improved credit profile to the high quality, popularity, and favorable reputation of Wynn’s resort properties, describing these factors as distinguishing advantages in the competitive gaming and hospitality sector.

Wynn Resorts ended the third quarter with $1.34 billion in cash on hand and $11.79 billion in debt. The company’s efforts to reduce its debt burden have been instrumental in earning the positive outlook from Moody’s. Wynn has permanently reduced its debt by approximately $1.2 billion, a move that the agency views as a significant step toward financial improvement.

“The positive outlook also reflects the company’s recent reduction in debt, with nearly $1.2 billion of debt permanently reduced. The positive outlook also incorporates our view that the company will maintain good liquidity, with ample cash balances,” Moody’s stated.

The ratings agency further cited expectations for continued EBITDA improvement in Macau and broader revenue growth as factors supporting Wynn’s ability to maintain strong liquidity while managing its liabilities.

Although Wynn Resorts currently has a relatively concentrated portfolio, including two properties in Macau, Wynn and Encore Las Vegas, and Encore Boston Harbor, the company’s geographic diversity is expected to improve with its ongoing expansion into the United Arab Emirates. Wynn is developing a casino resort in Ras Al Khaimah, UAE, named Wynn Al Marjan Island, which is scheduled to open in early 2027. This property will enjoy a multi-year monopoly and could play a pivotal role in establishing one of the largest gaming markets globally.

Moody’s indicated that a future ratings upgrade for Wynn would depend on the company maintaining a strong liquidity position and further reducing its debt.

“Ratings could be upgraded if debt/EBITDA on a Moody’s adjusted basis is maintained well below 6x. Good liquidity and continued revenue growth with strong positive free cash flow would also be needed for an upgrade,” Moody’s concluded.

With Macau’s resurgence, sustained success in U.S. operations, and strategic expansion into new markets like the UAE, Wynn Resorts is positioned for continued financial and operational growth in the coming years.

By fLEXI tEAM