Wynn Resorts (NASDAQ: WYNN) disclosed on Tuesday that it has sold $800 million in corporate debt through a private offering to retire bonds set to mature in 2025 and to cover a penalty of $130.13 million recently imposed by the Department of Justice (DOJ).
The recently released senior notes will mature in 2033, carrying an interest rate of 6.25%, and are “backed by all of Wynn Resorts Finance’s domestic subsidiaries” excluding Wynn Resorts Capital.
"Wynn Las Vegas, LLC will use the amounts to (i) redeem in full Wynn Las Vegas and Wynn Las Vegas Capital Corp.’s 5.500% Senior Notes due 2025 (the “2025 LV Notes”) and (ii) pay fees and expenses related to the redemption and (b) use the remainder of the net proceeds for general corporate purposes, which may include covering all or a portion of the $130 million forfeiture under the non-prosecution agreement described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 6, 2024,” according to a statement issued by the gaming company.
On Friday, Wynn informed investors that it had finalized a $130.13 million settlement with the Justice Department — marking the biggest penalty ever imposed on a single domestic casino — “due to acknowledgments of criminal misconduct,” as stated by the DOJ.
Wynn Bond Offering Indicates Quick Settlement of DOJ Fine
Although the gaming company didn’t specify when it would settle the $130.13 million debt to the government, the mention that some proceeds from the bond sale might be allocated to that payment suggests the casino operator may quickly address that responsibility.
In a probe conducted by the DEA, IRS, and the investigative division of the Department of Homeland Security, it was found that Wynn Las Vegas breached several anti-money laundering regulations and intentionally permitted certain disreputable Chinese clients to visit and gamble at the Strip integrated resort.
In an instance emphasized by the DOJ, Wynn Las Vegas allowed a Chinese customer who “served six years in prison in China for performing unauthorized international monetary transactions and breaching other financial regulations” to gamble at the venue.
In a nonprosecution agreement (NPA) with the government, Wynn Las Vegas admitted to misconduct and stated that it has implemented comprehensive strategies to enhance its anti-money laundering measures, while informing the government that employees connected to the dubious transactions are no longer with the company.
Wynn Bond Sale Has Another Objective
The Wynn bond sale not only aims to quickly remove the DOJ liability from its balance sheet, but it is also significant as it enables the operator to redeem bonds that are maturing next year.
Wynn collaborates with competitor MGM Resorts International (NYSE: MGM) in recently declaring fresh debt offerings intended to resolve obligations maturing next year. Prior to those announcements, several analysts pointed out that those transactions were unnecessary since gaming companies can manage their obligations set to mature in 2025.
In distinct yet connected news, gaming and lottery powerhouse International Game Technology (NYSE: IGT) announced on Tuesday that it will issue a new euro-denominated bond to repay almost $500 million in senior secured notes that will mature in 2025.