Wynn Resorts landed a $189 million furniture, fixtures and equipment loan in conjunction with a $1 billion corporate loan in an effort to secure as much delayed-draw bank loan capital as possible for the development of its Le Reve resort and casino. Matt Maddox, v.p. of investor relations and treasurer for Wynn Resorts, explained that the FFE loan, with a seven-year term and LIBOR plus 4% pricing, can be drawn down as needed. In addition, the FFE loan, led by Bank of America, also attracted new investors such as GE Capital, GMAC and CIT Group into the lending group.
Financial backing for the project also includes a $1 billion credit facility that comprises a six-year, $750 million revolver priced at LIBOR plus 4% and a seven-year, $250 million term loan at LIBOR plus 51/ 2%. The loan is led by Deutsche Bank, Bank of America and Bear Stearns. As the "strongest banks in the gaming industry, they were the obvious choices," noted Maddox.
Wynn Resorts also raised additional capital with $492 million in IPO proceeds and $370 million in 12% notes due 2010, priced to yield 131/ 2%. Maddox noted that even though the markets were rocky when the company needed to raise the financing, Wynn Resorts did not want to put the project, which had been more than two years in the making, on hold. Responding to whether the company would look to refinance its debt in the future, Maddox said, "We will always be opportunistic in the capital markets."