Tuesday, July 1, 2003 | 11:17 a.m.
SUN STAFF AND WIRE REPORTS
Wynn Resorts Ltd., the casino company headed by developer Steve Wynn, agreed Monday to sell $200 million in convertible notes to help finance a casino in Macau and for general corporate purposes.
Wynn stock fell $1.31 to $16.42 and traded as low as $15.90 on the Nasdaq Stock Market on the news this morning.
Investors may fear dilution of their shares' value if the notes are converted to stock.
The 6 percent notes will mature in 2015 and are convertible into Wynn Resorts stock at a price of $23 a share, the company said in a statement.
Wynn Resorts will use some of the proceeds to build a casino in the Chinese city of Macau, a former Portuguese colony near Hong Kong that is opening its casino market to rivals. Hotel and casino companies including Hilton Hotels Corp. and Mandalay Resort Group have sold convertible bonds to raise money more cheaply than selling traditional debt.
The company said its underwriters have an option of selling an additional $50 million of the notes to meet demand. About $35 million of the offering will be contributed to a subsidiary, which will purchase U.S. government securities to secure future interest payments, Wynn Resorts said.
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