Las Vegas Sands to pay down debt; investors cautioned

Las Vegas Sands Corp. plans to pay off more than $1 billion in outstanding debt while extending the maturity of about 75 percent of its loans by at another three years.

The move, announced Wednesday in a filing with the Securities and Exchange Commission, gives Las Vegas Sands some financial breathing room as the company moves to restart stalled casino projects in Macau and explore other gaming opportunities.

Analysts said the debt repayment follows several other steps the company, which owns The Venetian and Palazzo, has undertaken since late 2008 to recapitalize internally and stay solvent.

The company completed a $2.1 billion equity deal in November 2008, which reduced the ownership stake of Las Vegas Sands Chairman Sheldon Adelson from 65 percent to just about 50 percent. Last fall, Las Vegas Sands listed shares on the Hong Kong Stock Exchange in an initial public offering, which raised $2.5 billion.

"The completion of the U.S. amendment finalizes the sequence of transactions designed to strengthen the company's liquidity profile," Morgan Stanley gaming analyst Mark Strawn told investors in a research note. "While the amendment is not surprising, we believe it is a minor positive that solidifies Las Vegas Sands' liquidity, ensures covenant compliance, and simplifies its balance sheet."

Las Vegas Sands said it planned to make the payment because of its previously announced amendment to a credit facility.

The casino operator said the amendment extends the maturity of nearly 75 percent of its $3.9 billion in term loans and pushes their maturity to 2015 and 2016. The loans previously expired in 2013 and 2014.

In the SEC filing, Las Vegas Sands the payment would strengthen the company's cash position and overall financial profile.

The company expects to make the payment later this week.

Standard & Poor's Rating Services boosted its corporate credit rating on the company to B from B- because of the date extension.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said the company will probably accelerate construction plans on two sites along Macau's Cotai Strip that were halted almost two years ago when the credit markets collapsed. The company now operates three hotel-casinos in Macau.

Meanwhile, Las Vegas Sands'
$5.7 billion Marina Bay Sands resort in Singapore generated almost $95 million in cash flow during its first 65 days of operation.

"Today's news has the company better-positioned moving forward," Wieczynski told investors.

But he cautioned potential shareholders on investing.

"We continue to believe growth expectations, especially in Singapore, are inflated and would prefer to wait for a more attractive entry point," he said.

Shares of Las Vegas Sands closed at $30.29 on the New York Stock Exchange Wednesday, up 53 cents, or 1.78 percent.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.