Macau reported a sharp 68% YoY drop in casino revenues to MOP 3.3bn ($400mn) in May. Casino operators in Macau have been severely impacted by China’s zero-Covid policy, given that the mainland accounts for 90% of visitors to the gambling hub. While casino revenues are 25% higher compared to April, they are still just a fraction of the MOP 26bn recorded pre-Covid in May 2019. Reuters notes that Macau’s six casino operators including Wynn Macau are facing “daily revenue losses and accumulating debt as liquidity continues to dry up.” The financial strain from the pandemic has led several businesses to shut shop, pushing the unemployment rate up from 1.8% in 2019 to 4.5% currently. While the Macau government is urging casinos against mass layoffs, some operators are resorting to measures such as offering unpaid leaves, not renewing contracts and paying bonuses instead of full salaries. The IMF had warned in an April report that it would take the Chinese special administrative region several years to recover to pre-pandemic levels.

Wynn Macau’s 5.5% 2027s are trading higher this week to 78.28 cents on the dollar to yield 11%.

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