By Beth Jinks and Emre Peker
Feb. 24 (Bloomberg) — Las Vegas Sands Corp. will seek to refinance about $5 billion of U.S. loans this year after opening its Singapore casino resort, Chief Operating Officer Michael Leven said.
The Las Vegas-based company may ask lenders to amend and extend loans late this year, Leven said today in an interview in New York. The company may offer to repay a portion of the debt, pay fees and negotiate a new interest rate in exchange for the modifications, he said. There were about 130 lenders in the company’s original loan group, Leven said.
“I think we can get to a majority with a reasonable deal,” Leven said. “We don’t have to do it right away, it’s easy for us to watch the deals that are being done.”
Las Vegas Sands had $11 billion in long term debt as of Dec. 31, with an average weighted interest rate of 4 percent, Chief Financial Officer Kenneth Kay said last week on a conference call. The company has loans for its ventures in Las Vegas, Singapore and Macau, China.
Las Vegas Sands was unchanged at $16.09 at 4:15 p.m. in New York Stock Exchange composite trading. The shares more than doubled last year.
The company plans to wait until after it opens the Marina Bay Sands casino resort in Singapore, beginning on April 27, before negotiating with lenders, Leven said.
Casino Refinancings
Billionaire founder and Chief Executive Officer Sheldon Adelson has projected the $5.5 billion resort will add more than $1 billion in annual earnings before interest, taxes, depreciation and amortization.
“If Singapore opens well, our leverage gets much better,” Leven said. “Our interest rate carries pretty low at this time in both Macau and in the U.S., so there’s no rush to do it.”
Las Vegas Sands is among the casino operators working to push out maturities and reduce debt after a record two-year slump on the Las Vegas Strip eroded earnings and put some companies at risk of violating the terms of their credit agreements.
MGM Mirage, the biggest casino owner on the Las Vegas Strip, asked lenders to agree by today to extend most of its $5.55 billion of senior credit facilities in exchange for a higher interest rate, fees and repayment of part of the debt. Wynn Resorts Ltd., the casino company controlled by Stephen Wynn, in September amended a credit agreement allowing it to sell bonds and repay loans.
Harrah’s Entertainment Inc., the world’s biggest casino company, reduced its debt by $4.2 billion and extended some maturities through a series of exchange offers and other refinancing activity last year.
Debt Outstanding
Las Vegas Sands owed $4.7 billion on its U.S. senior secured credit facility as of Sept. 30, according to the company’s third-quarter regulatory filing, the most recent available. It consists of a $3 billion term loan with $2.93 billion outstanding, a $600 million delayed-draw term loan on which the company owed $592.5 million, a $400 million delayed- draw term loan with $397 million of debt and a $1 billion revolving credit line that has $775.9 million drawn, according to the report.
The term loans pay an interest rate 1.75 percentage point more than the London interbank offered rate, according to an Aug. 7 filing with the U.S. Securities and Exchange Commission. The revolver has a spread of 1.5 percentage point over Libor, the rate banks charge to lend each other.
Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., Citigroup Inc., Bank of Nova Scotia and JPMorgan Chase & Co. arranged the $5 billion credit facility in May 2007, according to the original agreement. The term loans mature on May 2013 and May 2014, while the revolver is due May 2012, according to data compiled by Bloomberg.
The company amended the terms of its bank debt last April, obtaining permission to buy back as much as $800 million of its term loans by Sept. 30 of this year, according to a regulatory filing. Bank of Nova Scotia, Canada’s third-biggest bank by assets, and Goldman Sachs, the most profitable securities firm in Wall Street history, arranged the agreement.
–Editors: Rob Golum, Anthony Palazzo, Richard Bedard
To contact the reporters on this story: Beth Jinks in New York at +1-212-617-5825 or bjinks1@bloomberg.net; Emre Peker in New York at +1-212-617-8742 or epeker2@bloomberg.net.
To contact the editors responsible for this story: Anthony Palazzo at +1-323-782-4228 or apalazzo@bloomberg.net; Alan Goldstein at +1-212-617-6186 or agoldstein5@bloomberg.net.
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