STEVE APPLYING MACRO ANALYSIS

WYNN announced a $1.3 billion note offering not due until 2020. Taking out the 2014 notes leaves no significant fixed maturities until 2017. Not exactly a bullish bet on the US economy.

WYNN is offering to sell $1.32 billion of First Mortgage Notes due 2020.  The proceeds will be used to purchase the 2014 Notes and in the process, will leave no significant fixed maturities until 2017.  WYNN’s credit facility does mature in July of 2013 but there is only $250 million drawn which shouldn't go any higher.  So is WYNN just overly conservative or is Steve actually scared?

In conjunction with the offering announcement, WYNN provided Wynn Las Vegas Q2 preliminary results.  EBITDA of $65 million actually beat our $62 million with table hold at 20%, exactly in-line with our projection.  Better margins drove the upside.

Mr. Wynn has made it clear that he is very much in disagreement with Obamanomics.  Pushing out the maturities may indicate that Steve fears stagflation and a potential credit crisis.  Hedgeye isn’t too far from that thesis.  If Steve is right, then this financial move is the right one.  Of course, if Steve is right, it won’t be good for US stocks, particularly gaming stocks with significant US exposure and leverage – MGM comes to mind.