Fitch Publishes Spotlight Report on Wynn & Gaming-Focused Bankruptcy Case
NEW YORK -- September 4, 2013
Fitch Ratings has published two reports today: a spotlight report on Wynn
Resorts, Ltd. and a bankruptcy case study special report focusing on the
gaming, lodging and restaurants sector.
The Wynn Resorts spotlight provides analysis on the company's dispute with
Okada; the funding of the Cotai project; its license pursuits in Pennsylvania
and Massachusetts; impact from Genting's Las Vegas project; Macau concession
expirations, and recovery prospects of the debt issued at the U.S. subsidiary.
The Wynn spotlight report also examines Fitch's outlook for the Las Vegas and
Macau markets, and the rating and economic relationships between the parent
company and the subsidiaries, supplemented with a Sources and Uses by
Subsidiary table. Additional resources and analysis include FCF scenarios, a
detailed maturity schedule, an organizational chart, covenant summaries and a
corporate governance summary.
The bankruptcy case study report summarizes 21 cases in the gaming, lodging
and restaurant (GLR) sector, including creditor recoveries and reorganization
enterprise values. The median EBITDA-to-enterprise valuation multiple for the
16 GLR reorganizations that had multiples available was 6.6x. This was
marginally higher than the 6.2x median cross-sector U.S. corporate
reorganization multiple for the 77 cases with reorganization multiples in
Fitch's U.S. corporate ultimate recovery database. There was a median EBITDA
to enterprise valuation of 7.1x for the 11 gaming cases with multiples
available, which is similar to the long-term historic average transaction
multiple of around 7.0x for the gaming industry.
While the petition dates for all 21 cases fell between 2006 -2012, 13 of those
companies filed for bankruptcy between 2008 -2010 at the height of the
recession and credit crisis. A recurrent cause of defaults included cuts in
consumer discretionary spending that led to lower revenues and cash flows. The
study reinforces the cyclical nature of the GLR sector, discusses key drivers
of the bankruptcies, regulatory considerations, and provides a screen of
issuers with significant default risk.
Both reports are available at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: U.S. Gaming, Lodging and Restaurant
Bankruptcy Enterprise Valuation and Creditor Recoveries
U.S. Leveraged Finance Spotlight -- Wynn Resorts, Ltd.
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Sharon Bonelli, +1 212-908-0581
Alex Bumazhny, CFA, +1 212-908-9179
Michael Paladino, CFA, +1 212-908-9113
Media Relations, New York
Alyssa Castelli, +1 212-908-0540
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