Wynn secures $ 1.5 billion line of credit as concerns over Macau escalate. Its stock drops.


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A general view of the Wynn Casino in Macau.

Chris McGrath / Getty Images

Wynn Resorts

said in a filing that it was granted a $ 1.5 billion credit facility from Bank of China Ltd., as it and other casinos that operate in the Chinese enclave of Macau face tighter government control over industry.

Wynn (ticker: WYNN) said the line of credit will be used to refinance the debt of

Wynn Macau

and its subsidiaries, as well as to “finance current working capital requirements and for general business needs”.

Earlier this week, Macau authorities announced the “healthy and sustainable development” of the gaming industry through regulatory improvements. Macau has also presented plans to increase local ownership in gaming companies.

Shares of Wynn Resorts and other casino companies operating in Macau, such as

Sands of Las Vegas

(LVS) and

Melco Resorts & Entertainment

(MLCO), fell sharply this week following the launch of a 45-day consultation on reform of the territory’s gambling laws.

Read also: Macau’s Casino Operations Review Triggers Mass Sell, Buy Opportunity

The tighter restrictions in Macau led Jefferies analysts to lower Wynn’s price target to a Wall Street low of $ 83, from $ 104. Analysts have maintained their Hold rating on the title.

Jefferies also lowered his rating on Las Vegas Sands to Hold from Buy and lowered his price target to $ 40 from $ 60. Analysts noted “the unresolved uncertainties surrounding the Macao concession and its prospects for growth and performance.”

Wynn lost 0.4% in pre-market trading on Friday to $ 84.00, while shares of Las Vegas Sands fell 0.6% to $ 37.31. Melco is up 1.57%.

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