NEW YORK--(BUSINESS WIRE)--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
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=714757
U.S. Leveraged Finance Spotlight -- Wynn Resorts, Ltd.
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=716838
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