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Las Vegas Sands Corp. (NYSE:LVS), a casino operator with a market capitalization of $31.5 billion and impressive gross profit margins of 79.4%, has entered into a substantial credit agreement, securing approximately $8.98 billion in financing for its subsidiary, Marina Bay Sands Pte. Ltd. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, despite short-term obligations currently exceeding liquid assets. The agreement, finalized on February 21, 2025, includes a term loan, a revolving credit facility, and a delayed draw term loan, which will support the Marina Bay Sands integrated resort expansion in Singapore and refinance existing debt.
The credit facilities consist of a 3.75 billion Singapore dollar term loan (about $2.81 billion), a SGD 750 million revolving credit facility (approximately $561 million), and a SGD 7.5 billion delayed draw term loan (around $5.61 billion). The terms of the agreement stipulate that the proceeds from the term loan and revolving credit facility will be used for refinancing purposes, general corporate expenditures, and potential dividend payments. In contrast, the delayed draw term loan will finance the Marina Bay Sands expansion project.
Interest rates for the loans will be based on the Compounded Singapore Overnight Rate Average plus a margin that varies with the borrower’s debt-to-EBITDA ratio. With current EBITDA at $3.76 billion and a debt-to-equity ratio of 4.83, the company’s leverage metrics will be crucial for determining these rates. Additionally, the borrower will incur a fee on undrawn amounts, contingent on the utilization of the facilities. For detailed analysis of LVS’s debt structure and financial metrics, InvestingPro subscribers can access comprehensive research reports covering 1,400+ top stocks.
The agreement mandates quarterly interim amortization payments and full repayment of the principal on the maturity dates, which are set at 84 months from the closing date for the term and delayed draw term loans and 78 months for the revolving facility.
The borrower is also obligated to prepay with proceeds from asset sales, new debt issuances, or in the event of changes to the casino license. The agreement includes financial covenants such as maintaining certain debt-to-EBITDA and EBITDA-to-interest expense ratios, as well as a positive net worth.
This financing arrangement is secured by a first-priority interest in most of the borrower’s assets, with standard covenants and default provisions typical of such agreements.
The announcement also notes that on February 18, 2025, Marina Bay Sands delivered a prepayment notice for all outstanding debt under the previous 2012 credit agreement, conditional on the proceeds from this new financing.
This strategic move by Las Vegas Sands, detailed in an SEC filing, underscores the company’s commitment to its Singapore operations and sets the stage for the anticipated expansion of its iconic Marina Bay Sands resort. With revenue growth of 8.93% in the last twelve months and analysts predicting continued profitability, the company appears well-positioned for this expansion. InvestingPro’s Fair Value analysis suggests that LVS stock is currently trading below its intrinsic value, potentially offering an attractive entry point for investors interested in the company’s growth trajectory.
In other recent news, Las Vegas Sands Corp. reported its fourth-quarter 2024 earnings, which fell short of analyst expectations. The company posted earnings per share of $0.54, missing the forecast of $0.58, and revenues were slightly below expectations at $2.9 billion compared to the anticipated $2.91 billion. Despite this, the company announced an increase in its annual dividend to $1 per share for 2025 and engaged in stock buybacks, including $450 million of Las Vegas Sands stock and $250 million of Sands China (OTC:SCHYY) stock. The Londoner Grand Casino (EPA:CASP) was opened, with full completion expected by May 2025. Las Vegas Sands is also exploring strategic collaborations and potential market expansions in Thailand and the U.S. Analysts from firms like Deutsche Bank (ETR:DBKGn) and UBS have shown interest in the company’s strategic moves and market positioning. The company remains optimistic about future growth, with projections of meaningful EBITDA growth and margin expansion.
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