One of the jewels in Macau’s extensive crown has refinanced in a deal that will strengthen the company’s financial position. Sands China, the Far East subsidiary of Las Vegas Sands (LVS), received commitments from its banks for a further $3.5billion of loans and an option to take this up by another $1billion should they need to do so.
According to Bloomberg, a statement to the Hong Kong Stock Exchange read that the new credit facility is expected to “significantly reduce” the company’s interest expenses and strengthen its financial flexibility. It addition, it will help extend their debt maturities until 2016.
In addition to refinancing their debt, the loan will be used to fund the company’s expansion on Macau’s Cotai strip as they look to cement their position in the biggest casino market in the world. Expansion on the strip could be delayed as a result of Melco Crown signing a deal yesterday to take an even larger stake in one project on the strip.
The new facility consists of a $3billion five-year term loan and an undrawn $500million revolving loan over the same period. Once the undrawn loan is repaid, it can be borrowed again and the both are “subject to a pricing grid and, after a six-month period, will have initial pricing set at 2 percent above the London interbank offered rate.” It’s thought that the company approached 14 banks for the loan.
LVS saw first-quarter sales and profits below what many were estimating thanks to lower winnings from table games in Nevada. This would go to explain why they’re looking to get on with it as far as their expansion on the Cotai strip is concerned.