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Las Vegas Sands to sell $600 million in bonds2 September 2009
By Steve Green, Las Vegas Sun
The company said the bond offering would improve its liquidity position.
The money will be used for general corporate purposes, including covering some of the company's Macau development costs.
The company, hurt like other leveraged gaming operators by the worldwide recession, lost $222.2 million or 34 cents per share in the second quarter ending June 30.
Interest costs on its $12.8 billion of liabilities -- including $10.6 billion in long-term debt -- totaled $64.8 million in the quarter. Preferred stock obligations cost it another $46.3 million, the company reported.
Besides its Macau casinos, the company has big resorts in Las Vegas, a casino in Pennsylvania and is preparing to open a megaresort in Singapore.
Las Vegas Sands stock opened higher Wednesday morning, trading at $13.67, up 22 cents.
The company called the $600 million bond sale "pre-IPO' financing. The notes will pay 9 percent through September 2010. If notes are not converted to stock, the interest rate rises to 12 and then 15 percent through 2014.
"The completion of this financing, which we expect to occur in a matter of days, will enhance our current liquidity position and further our efforts toward reaching long-term financial stability," Las Vegas Sands Corp. Chairman and Chief Executive Sheldon Adelson said in a statement.
Las Vegas Sands President Michael Leven said in the statement that the pre-IPO financing is a component of the company's efforts to strengthen its financial position. Other components are the recent completion of an amendment to its $3.3 billion Macau credit facility and the submission of an application by a subsidiary of the company to be listed on the Hong Kong Stock Exchange.
"The actions we have taken in recent weeks, together with the right-sizing of our cost structure and our on-going efforts to implement efficiencies across our operations, have clearly helped to strengthen our balance sheet," Leven said in the statement.
"We will continue working to solidify our financial position while at the same time staying true to our long-term business strategy. Our company remains uniquely positioned to develop large-scale integrated resorts and to monetize the various non-core assets of those developments, such as retail malls and residential units, when economic and capital market conditions are appropriate," Adelson added. "This fundamental business strategy guides the planning and development of our current pipeline of projects and helps us evaluate future development opportunities as well. It also enables our company to de-lever more quickly than companies that rely largely on operations to do so, which is a key component in our ability to generate significant long-term value for our shareholders."
Copyright © Las Vegas Sun. Inc. Republished with permission.