Wynn Resorts, Las Vegas Sands amend debt agreements

By Amanda Finnegan

Published Tuesday, April 21, 2009 | 1:54 p.m.

Updated Tuesday, April 21, 2009 | 3:31 p.m.

Wynn Resorts announced today it has entered into a credit agreement with lenders to help weather the economic storm.

Wynn Resorts said it has successfully completed an amendment of Wynn Las Vegas, LLC’s senior secured agreement. The agreement waives leverage covenants, which refers to debt relative to cash flow, until June 2011, and extends a debt maturity until July 2013.

Wynn said it has more than $1.3 billion of available cash and about $4.5 billion in long-term debt.

In exchange for the two-year maturity extension and covenant relief, Wynn agreed to reduce its revolving debt to $697 million and increase interest rates on revolving commitments from 1.7 percent to 2.6 percent.

The amendment gives Wynn more breathing room on leverage covenants as economic conditions have affected the company’s cash flow in Las Vegas, Union Gaming Group gaming analyst Bill Lerner said.

Lerner said because of the declining economy causing risks the company cannot directly control, there was a risk Wynn might violate those covenants.

Wynn was not in any immediate danger to violate debt covenants, Lerner said.

“Wynn does an exemplary job of resolving what could potentially be issues and raising capital when they don’t need to (without an emergency). This is a great way to behave fiscally,” Lerner said.

The amendment buys balance sheet cushion to use liquidity to do other things, Lerner said, such as possibly buying back properties like the Bellagio or

The Mirage, but relief is a first priority.

“If there was risk that they were going to violate any debt covenants, they would pursue that relief regardless of whether there were any opportunities to capitalize of the strength of their balance sheet,” Lerner said.

Wynn last entered into an agreement with lenders in September 2008, which allowed it to raise an additional $150 million to finish Encore Las Vegas.

Las Vegas Sands also announced today that it entered into an agreement with lenders. Las Vegas Sands said in a regulatory filing that the new agreement it has reached with lenders will let it buy back up to $800 million in debt.