Moody's downgraded Wynn Resorts Ltd.'s corporate family rating to Ba3 from Ba2 and its probability of default rating to Ba3-PD from Ba2-PD, while assigning the company an SGL-1 speculative grade liquidity rating.
The rating agency also downgraded Wynn Las Vegas LLC's $1.8 billion of 5.50% senior notes due 2025 to B1 (LGD 5) from Ba3 (LGD 5), Wynn Macau LLC's $1.35 billion of 5.25% senior notes due 2021 to B1 (LGD 5) from Ba3 (LGD 5), and Wynn America LLC's $375 million senior secured revolver due 2019 and $875 million senior secured delayed-draw term loan due 2020 to Ba2 (LGD 2) from Ba1 (LGD 2).
"The downgrade considers that Wynn did not achieve 6.0 times net debt/EBITDA target that Moody's previously stated would be necessary by the time the $4.1 billion Wynn Palace opened for Wynn to avoid a downgrade," Moody's Senior Vice President Keith Foley said in a release.
Moody's said the ratings are backed by the quality, popularity and favorable reputation of Wynn's casino properties, as well as favorable prospects for its Everett, Mass., casino. However, the rating agency cited Wynn's limited diversification and high leverage as among its key credit concerns.
The company's outlook is stable, reflecting Moody's view that Wynn will start to lower its leverage, albeit at a slower pace than anticipated, as well as the company's financial flexibility, thanks to its lack of near-term debt maturities and very good liquidity profile.