The company, controlled by billionaire Steve Wynn, boosted borrowings from $1.25 billion after more than 50 banks and funds offered to lend more than it sought, said the people, who declined to be identified because details aren't public. Bank of America Corp., Deutsche Bank AG and Societe Generale SA are arranging the financing, they said.
Wynn, 65, entered Macau in September after China in 2002 ended Stanley Ho's 40-year casino monopoly in the former Portuguese enclave. The loan will trim Wynn's interest costs and finance an expansion that will more than double the size of the 110,000 square-foot (10,200 square meter) Wynn Macau.
``Wynn managed to take market share in Macau very quickly because it has a very high-quality property in a good location,'' said Peter Drolet, a Hong Kong-based analyst at UOB Kay Hian Pte. ``Wynn also has a very good Chinese VIP client list from their casinos in Las Vegas.''
The new credit, denominated in Hong Kong and U.S. dollars, will replace a $764 million deal signed in 2005. Wynn will pay 1.75 percentage points more than the U.S. dollar and Hong Kong dollar benchmark lending rates for the loans, which mature in five and seven years, said the people.
The London interbank offered rate for dollar lending was set at 5.36 percent yesterday. The equivalent Hong Kong interbank offered rate was at 4.42 percent today.
Borrowings Tripled
Wynn has about 14 percent of Macau's casino gaming market, according to Bloomberg News calculations based on statistics from the company and Macau's gaming control board. Rival Las Vegas Sands Corp., which opened the Sands Macau in 2004, has about 16 percent.
In the first quarter, the $1.2 billion Wynn Macau earned $79 million before interest, taxes, depreciation and amortization, or 42 percent of Wynn Resort's total profit on that basis, according to Wynn's latest earnings report.
Grant Bowie, president of Wynn Macau, wasn't immediately available to comment. Spokespeople for the banks either declined to comment or weren't immediately available.
In less than three years, Wynn more than tripled borrowings for Macau while halving the interest margin, data compiled by Bloomberg show. This is the second time since September 2004 that lenders cut the interest they charge Wynn Macau, as banks become more confident lending to the city's gaming industry.
Overtaking Vegas
Wynn Macau paid 3.5 percentage points above Libor for the seven-year portion of a $397 million loan signed in 2004, Bloomberg data shows. The credit was replaced a year later by the current loan, which pays as little as 2 percentage points more than Libor for the six-year, $729 million part.
Gaming revenue in Macau surged 23 percent last year to 55 billion patacas ($6.83 billion), surpassing Las Vegas Strip, which took in $6.69 billion. Some 2.2 billion people live within a five-hour flight of Macau, five times the equivalent for Las Vegas, according to CLSA Asia-Pacific Markets.
Las Vegas Sands recouped its $265 million investment in Macau in eight months after opening the 740-table Sands Macau in 2004. That resort ended the four-decade monopoly of Ho, the 85- year-old Macau mogul whose share of gambling revenue has since plunged to 55 percent and keeps shrinking.
Wynn will open 25,000 square feet of the planned 123,000 square-foot gambling space extension in the third quarter. The company this month said it will slow expansion in Macau on concern new Chinese visa requirements may curb travel.
