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Moody's Upgrades Sands' Debt Ratings

"Moody's Investors Service raised ratings on the company's $850 million 11 percent second mortgage notes due 2010 to B3 from Caa1; $75 million senior secured revolving credit facility due 2007 to B1 from B2; $50 million senior secured term loan due 2007 to B1 from B2; $250 million senior secured term loan due 2008 to B1 from B2; senior implied rating to B2 from B3; and long-term senior unsecured issuer rating to Caa1 from Caa2. Moody's also gave the company a "stable" ratings outlook.

"The ratings have speculative "junk bond" status, indicating a high risk for investors, but similar to those used to build many Las Vegas resorts, including the Aladdin and The Mirage.

"Moody's said the company, which was placed on review for a possible upgrade in October, has favorable prospects in 2003 because of improved cash flow from the $235 million hotel tower project that will bring 1,000 new suites on line in the summer.

""Moody's expects that Venetian's full year 2002 EBITDA (cash flow) will be between $180 million and $190 million, which will effectively put Venetian back to a level of operating cash flow similar to what it experienced prior to the Sept. 11 tragedy," Moody's said.

""This improvement, combined with the expected cash flow contribution from the Phase 1A hotel tower opening scheduled for June should lower leverage by the end of fiscal year 2003 to a level below the maximum leverage ratio covenant contained in the secured bank loan agreement."

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