Pricing revealed for US$5.46-bln Sands China debt issue

in Finance

Casino operator Las Vegas Sands Corp and its Macau subsidiary Sands China Ltd have announced pricing for the debt issue first announced on July 26. Sands China told the Hong Kong Stock Exchange on Thursday it was offering US$1.8 billion of 4.6 percent senior notes due in 2023, US$1.8 billion of 5.125 percent senior notes due in 2025 and US$1.9 billion of 5.4 percent senior notes due in 2028.

Sands China says it intends to use the net proceeds of about US$5.46 billion to repay loans under its existing credit facility and for general corporate purposes, including on capital projects.

The Macau casino operator announced it would issue debt paper on July 26 but Thursday’s announcement fleshed out the details.

The company told the Hong Kong Stock Exchange that the issue “will further strengthen the liquidity position of the group and will further extend the international profile of the company”. The statement from Sands China says its “board believes that the notes issues represent a timely opportunity for the company to refinance the group’s existing indebtedness under the VML credit facility at competitive rates and to extend the maturity date of its indebtedness beyond that of the VML credit facility”.

The abbreviation VML refers to Venetian Macau, S.A. – also known as Venetian Macau Limited – a subsidiary of Sands China. Fitch Ratings Inc estimates Sands China’s total outstanding loans came to about US$4.8 billion as of June 30.

Las Vegas Sands said previously it would spend some capital on income-producing projects and maintenance of its properties in Macau that has been estimated at just over US$1 billion this year, US$1.25 billion next year and US$770 million in 2020.

In a second written statement issued on Thursday, Las Vegas Sands said it expected the Sands China offer to close on August 9. The joint bookrunners are Barclays Capital Inc, Goldman Sachs and Co LLC and Merrill Lynch, Pierce, Fenner and Smith Inc. Sands China intends to list the notes in Hong Kong and says the exchange has told it the debt paper is eligible for listing.

Moody’s Investors Service Inc. has given the issue a Ba1 rating, which is considered below investment grade. In a statement issued last month, Moody’s said the “decision to issue unsecured debt places the company closer to a low investment grade rating”.