Wynn Resorts rises on amended debt agreement

Apr 22, 2009 7:54 PM
Staff & Wire Reports |

Shares of Wynn Resorts Ltd. climbed Wednesday after the casino operator managed to work out a new debt amendment that will give it more time to repay billions of dollars in notes.

Late Tuesday, the Las Vegas-based company said its new agreement waives certain covenants until June 2011 and extends to July 2013 the maturity on $610 million of its remaining $697 million in revolving credit. Wynn in turn agreed to a higher overall rate on the debt.

The casino operator, which is led by billionaire Steve Wynn, has $4.5 billion in long-term debt and more than $1.3 billion in cash.

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Bernstein Research's Janet Brashear was pleased with the amendment.

"The new credit agreement terms give Wynn increased financial flexibility, especially amid what we believe will continue to be a turbulent and potentially unpredictable Las Vegas gaming market," she wrote in a client note.

Brashear kept an "Outperform" rating and price target of $30.

Robin Farley of UBS ( UBS - news - people ) said the amendment will help Wynn maintain its strong liquidity position. The company, which has no debt due this year, is actively raising funds to pay off the $375 million left on its 2010 debt, the analyst added.

Farley reaffirmed a "Buy" rating and $33 price target.

Wynn Resorts' stock gained $3.33, or 10.5 percent, to $34.92 in morning trading. The shares have traded in a 52-week range of $14.50 to $119.74.