Casino operator Las Vegas Sands Corp (LVS), which runs gaming resorts in Macau and one in Singapore, has a ‘Baa3’ long-term rating with ‘stable’ outlook on its senior unsecured obligations, supported by the “high quality, popularity, and favourable reputation” of its properties, says Moody’s Investors Service Inc in a Tuesday update.
In Macau, Las Vegas Sands’ unit, Sands China Ltd, is one of that city’s six casino concessionaires. In Singapore, the parent group runs Marina Bay Sands, one half of that city-state’s casino duopoly.
“The stable outlook reflects our expectation that visitation and gaming revenues will continue to ramp up in 2024, enabling Las Vegas Sands to restore credit metrics to levels in line with our expectations for the Baa2 Sand China Ltd / Baa3 Las Vegas Sands senior unsecured ratings, including leverage in the low 3x range,” said Moody’s.
The institution added: “The outlook also incorporates our expectation that the company will maintain ample liquidity, and manage its upcoming maturities in a timely manner and reduce overall debt levels.”
Moody’s noted that “key credit concerns” included the likelihood that Las Vegas Sands would “continue to pursue further and significant global casino resort development opportunities that will likely be funded largely with debt that could lead to temporary leveraging”.
The casino group has already said it aims to pursue an upstate casino licence for New York state in the United States. The executive director of the New York State Gaming Commission recently said it could be “late 2025” before a decision were made on the successful bidders.
In its Tuesday update, Moody’s also mentioned the “likelihood” that Las Vegas Sands would “return capital to shareholders in the form of share repurchase and dividends as operations have ramped back up” in its markets in Asia, following travel restrictions linked to the Covid-19 pandemic.
Share repurchases and the payment of dividends “remains a credit constraint,” stated Moody’s.
The Las Vegas Sands parent restarted payment of dividends in August last year.
It “paid approximately US$150 million in third-quarter and fourth-quarter 2023 dividends, respectively, and we expect this amount to continue on a quarterly basis going forward,” stated the ratings agency.
In October last year, it increased its share repurchase programme to US$2 billion and extended the expiration to November 2025.
In December, the parent company paid circa US$250 million to purchase shares of Sands China. It also repurchased up to US$250 million of its own shares, sold by the group’s largest stockholder, Miriam Adelson.
