Sands China announced last Friday that it had requested to be able to list new senior notes on the Hong Kong Stock Exchange (HKSE). The notes were valued at over $5 billion and carried different interest rates and due dates.
Approximately $1.69 billion in notes carrying a 4.6% coupon rate would become due in 2023. Another $1.79 billion, with an interest rate of 5.125%, would become due in 2025 and over $1.89 billion would become due in 2028 and carry a 5.4% interest rate.
The prices had been established by the company last August after it made an announcement about the issuance a month prior. The money received from the transactions, around $5.46 billion, is expected to be used to pay loans in accordance with a current credit facility, as well as for general corporate purposes, according to the HKSE filing.
Stockbroker firm Morningstar asserted just over a week ago that Sands China’s weak share price was providing the perfect opportunity for long-term investors. The company had a slow 2018, reporting a year-on-year decrease in fourth-quarter net income of 10.4%, or $465 million. For the year, however, it saw a 19% increase year over year, climbing from $1.60 billion in 2017 to $1.90 billion last year.
The troubles don’t seem to be over for Sands China or its parent company, Las Vegas Sands. Morningstar also stated that 2019 could be slower for the company and investor sentiment is dropping among institution investors. According to several reports, institutional sentiment dropped to 0.99 in the third quarter of last year, a drop of 0.25 from the previous quarter. 245 investment managers have decreased and sold holdings.
Las Vegas Sands saw a net loss of $40 million in the fourth quarter of last year, down from a net income of $1.36 billion a year earlier. That loss was due, in part, to a one-time income tax payment of $727 million it made to the U.S. Internal Revenue Service. The result was a full-year net profit of $2.95 billion, 9.6% lower year over year.
$5 billion is a huge chunk of money to have to borrow to repay debts and keep a business operating. Perhaps Sands CEO Sheldon Adelson should use his money to shore up the family business instead of donating millions of dollars to political campaigns.
