Casino group Las Vegas Sands Corp, parent of Macau casino operator Sands China Ltd, is to issue US$1.75 billion in senior unsecured notes, according to a Tuesday prospectus. Proceeds from the issuance will be used to refinance the company’s US$1.75-billion notes due in August this year.
The notes are to be issued in three tranches: US$750 million in 5.900-percent senior notes due in June 2027; US$500 million in 6.000-percent notes due in August 2029; and US$500 million in 6.200-percent notes due in August 2034.
Las Vegas Sands also runs the Marina Bay Sands casino resort in Singapore.
Moody’s Investors Service has assigned a “Baa3” rating to Las Vegas Sands proposed note issuance. “All of the company’s ratings, including the existing ‘Baa3’ rating on the senior unsecured notes, remain unchanged,” stated the ratings agency in a Tuesday report. The casino group’s outlook “remains stable,” the institution added.
According to Moody’s, Las Vegas Sands’ refinancing “improves the company’s maturity profile”.
“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,” added the ratings agency.
CBRE Capital Advisors Inc observed in a Tuesday memo that Las Vegas Sands “was in good position to tap the debt capital markets to address its 2024 maturity, given the ongoing recovery in Macau, strength in Singapore, and subsequent deleveraging due to EBITDA [earnings before interest, taxation, depreciation, and amortisation] growth”.
“This issuance was well-anticipated and with the 2024 maturity resolved, Las Vegas Sands’ focus in second-half 2024 can begin to turn to the US$1.8 billion maturing at Sands China in 2025, as well as another US$500 million at Las Vegas Sands level,” wrote analysts Colin Mansfield and Connor Parks.
“Las Vegas Sands should be a regular unsecured issuer over the next few years and the credit profile provides exposure to two strong, global gaming jurisdictions, a prudently-managed balance sheet and shareholder return strategy, and modest leverage,” they added.
According to CBRE, Las Vegas Sands’ first-quarter gross leverage “improved to 3.3 times from 3.6 times quarter-on-quarter, thanks primarily to EBITDA growth”.
“On the first-quarter 2024 earnings call, [Las Vegas Sands’] management reiterated its commitment to investment grade and long-held financial policy of maintaining gross leverage of ‘2.0 times to 3.0 times’,” said the CBRE team.
