A dozen banks sign up to finance Wynn project

Friday, Aug. 6, 2004 | 10:48 a.m.

BLOOMBERG NEWS

MACAU -- Deutsche Bank AG and Societe Generale SA signed up 12 banks to join a $397 million loan for the Macau unit of Wynn Resorts Ltd., the Las Vegas casino firm run by Steve Wynn, said a banker involved in the transaction.

The banks offered to lend more than the amount sought for the casino group's first overseas gambling project, the banker said without disclosing the amount offered. Macau, on the southern coast of China, is a former Portuguese colony that reverted to Chinese rule in 1999.

Wynn Resorts (Macau) is building a hotel, casino and retail complex in Macau that is expected to be finished in 2006 at a cost of $705 million.

Macau gets more than two-thirds of its tax revenue from gambling. It's trying to boost an industry dominated for four decades by casino tycoon Stanley Ho, whose 12 Macau casinos made $412 million last year. In 2002, the government awarded three licenses to Galaxy Resort & Casino and its partner Las Vegas Sands Inc., Steve Wynn, and Ho.

The other 12 lenders are: Aozora Bank Ltd., Banco Nacional Ultramarino SA, Bank of China, Shinsei Bank Ltd., Korea First Bank, WestLB AG, Banco Comercial de Macau SA, Canadian Eastern Finance, which is a unit of Canadian Imperial Bank of Commerce, Industrial & Commercial Bank of China, Allied Irish Banks Plc, Banco Espirito Santo SA and Banco Delta Asia.

Wynn Macau, 82 percent-owned by Wynn Resorts, is borrowing $352 million for seven years in U.S. or Hong Kong dollars, the banker said. Deutsche Bank and Societe Generale also arranged a credit line of as much as $30 million.

The company will pay an interest margin of 3.5 percentage points more than the London or Hong Kong interbank offered rates for the term loan, the banker said. Three-month Libor was last at 1.71 percent. Three-month Hibor was 0.98 percent.

The company is also borrowing $15 million in Hong Kong dollars or Macau patacas for working capital. The three-year facility has an interest margin of 2.5 percentage points.

Steve Wynn wasn't immediately available to comment.

The remaining cost of the project will be funded by equity, said the banker without giving details. Wynn Resorts is rated B by Standard & Poor's with a stable outlook.

Macau is the only place where the 1.3 billion people in China, Taiwan and Hong Kong can gamble in legal casinos.