Wynn Resorts entered into an "interest rate swap" deal with JPMorgan Chase Bank, whereby Wynn will pay the banker 2.65 percent more on borrowings of up to $325 million, according to the firm’s Form 8-K report submitted last week to the Securities and Exchange Commission.
The fixed interest rate of 2.65 percent would be added to the floating rate of 4 percent, for a total rate of 6.65 percent on the $325 million, the report said.
The pact gives Wynn Resorts interest rate protection by exchanging a floating interest rate for a fixed rate, company officials said.
The agreement, signed May 30, is to last from March 1, 2004 to December 1, 2006, past the anticipated 2005 opening of Wynn’s Le Reve hotel-casino at the old Desert Inn site.
The purpose of the agreement was so Wynn Resorts could "hedge a portion of the underlying interest risk on future borrowings under the company’s existing credit facility," the company reported. — Jeff Burbank