Wynn raises $800m in private debt to address DOJ settlement

Wynn Resorts has raised new debt to address a recently imposed historic fine on the company by the US Department of Justice.

Although the penalty has been described as a settlement between the company’s Wynn Las Vegas entity and the department, it still costs an eye-watering $130m, the largest financial enforcement a US-based casino has faced.

Wynn Resorts issues senior notes to address DOJ settlement and redeem debt

As a result, Wynn has issued new senior notes due to maturity in 2033 and come with an interest rate of 6.250%, allowing the company to raise $800m. Part of the money will be used to redeem its full senior notes due in 2025 at an interest rate of 5.500%, which Wynn Las Vegas and Wynn Las Vegas Capital Corp previously issued.

More importantly, however, the casino will be addressing the $130m penalty, which while unlikely to disrupt the company’s long-term plans still represents a significant financial setback. Wynn has acknowledged the accusations against the company and acquiesced that it had failed to properly monitor certain guests.

The DOJ alleged that complicated money-laundering schemes were taking place at the casino floor in Las Vegas, Nevada, alleging that overseas patrons would use third-party processors to collect US dollars for them in the country and bring the money to them in cash at the casino.

Wynn mends its ways as it eyes future business opportunities

These patrons would have not otherwise been able to transfer money using conventional banking methods. The schemes described in the DOJ settlement included "Human Hat" and "Flying Money," both translated from their Chinese names, as many wealthy Asians, and Chinese in particular wanted to avoid detecting and continue playing at Las Vegas casinos but could not do so by openly transferring funds via the bank system.

Wynn assured authorities that it has moved away from such practices. In turn, the DOJ agreed to the $130m settlement, the largest in the casino industry. Meanwhile, Wynn remains focused on its future, including plans to open the world’s first casino in the Middle East, located in the UAE.

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