Las Vegas Sands Corp, a prominent casino group, has announced its intention to issue new senior unsecured notes as part of a strategic refinancing initiative. This move, detailed in a preliminary prospectus released on Tuesday, aims to manage the company's financial obligations effectively. The document did not specify the aggregate value of the notes to be issued.
The primary purpose of the net proceeds from this offering, combined with the company's existing cash reserves, is to fully redeem the outstanding US$500-million, 2.900-percent senior notes due in June 2025, along with any accrued interest. Additionally, the funds will cover transaction-related fees and expenses. Las Vegas Sands also plans to allocate some of the proceeds for general corporate purposes, which may include repurchasing its common stock.
Financial Health and Ratings
Las Vegas Sands, the parent company of Sands China Ltd in Macau and the operator of the Marina Bay Sands casino resort in Singapore, has received a 'BBB-' rating from Fitch Ratings Inc for its new senior unsecured notes offering, accompanied by a 'stable' outlook. Fitch Ratings noted that the casino group's leverage is expected to remain suitable for the 'BBB-' rating, despite a slight increase.
The rating agency praised Las Vegas Sands for its solid access to capital, abundant liquidity, and conservative balance sheet management. In 2024, the company's earnings before interest, taxation, depreciation, and amortisation (EBITDA) leverage was reported at 3.4 times, with a net EBITDA leverage of 2.5 times. Fitch suggested that achieving sustainable leverage below 3.5 times could lead to a rating upgrade within the next 12 to 24 months. The agency also highlighted that stronger performance in Macau and continued stability in Singapore should help maintain these credit metrics.
Las Vegas Sands' management targets a gross debt ratio of 2.0 times to 3.0 times, before considering the impacts of development projects. Despite the company's share repurchase program and a recent dividend increase, Fitch believes that the free cash flow will be sufficient to support these initiatives.
Market Position and Liquidity
CBRE Equity Research expressed a 'favourable' view on Las Vegas Sands' new note issuance, citing the company's full ownership of Marina Bay Sands and its strong liquidity position. As of the first quarter of 2025, Las Vegas Sands had a US$1.5-billion revolver capacity and US$1.7-billion in cash. In February, Marina Bay Sands Pte Ltd secured a new SGD12.00-billion (US$9.19-billion) credit facility agreement, part of which will finance the expansion of the Singapore complex.
CBRE believes that Las Vegas Sands was well-positioned to tap the capital markets for refinancing the notes due in June 2025, given its favourable leverage profile and the timely extraction of US$1 billion from Sands China, which was used to repay a parent subordinated loan. In March, Sands China repaid 'in full' a US$1-billion subordinated unsecured term loan from Las Vegas Sands, more than three years ahead of schedule. The Macau unit also announced a new credit facility agreement amounting to HKD32.45 billion (US$4.18 billion) in October of the previous year.
As of the first quarter of 2025, Las Vegas Sands had US$3.2 billion in total liquidity, comprising revolver capacity and cash, compared to US$4.0 billion in unsecured debt. The company's liquidity outlook has improved following its decision to exit the bidding process for a downstate New York full-scale casino licence. CBRE anticipates that share repurchases will be ramped up, noting that this approach offers more flexibility than recurring dividends.
Last week, Las Vegas Sands announced its decision not to participate in the bidding process for up to three commercial casino licences in downstate New York. Patrick Dumont, the group's president and chief operating officer, stated, 'We believe the highest and best use of our capital in the near term is to purchase Las Vegas Sands' and Sands China's shares. Accordingly, Las Vegas Sands has decided not to bid for a casino license in New York.'
Source: LVS to issue US$1.5bln notes to refinance existing debt, repurchase shares, GGRAsia, April 30, 2025.
Posted by Wizard
May 05 2025
May 05 2025
Comments
No comments for this article.