Published on: November 27, 2024, 12:22h.
Last updated on: November 27, 2024, 12:33h.
Las Vegas Sands (NYSE: LVS) is reportedly seeking a three-tranche loan of close to $9 billion to expand its Marina Bay Sands casino resort in Singapore.
Reports of the $8.9 billion loan came out earlier this month, making it the largest corporate loan in Singapore’s history. Sources close to the matter revealed that the loan could be divided into $5.6 billion in delayed-draw term financing, $2.8 billion in term loans, and a $560 million credit facility.
DBS Group Holdings Ltd., Malayan Banking Bhd., Oversea-Chinese Banking Corp., and United Overseas Bank Ltd. are marketing the loan, with other banks possibly joining the consortium.
The Marina Bay Sands credit is being offered to a wide range of institutional investors, with an expected annual interest rate of 120 basis points.
Singapore Casino Expansion Costs Continue to Rise
Rumors about Sands seeking a $9 billion loan surfaced almost a year after similar speculation that LVS was looking to secure $7.5 billion for the Singapore integrated resort.
If Sands does end up borrowing around $9 billion, it would exceed the initial estimate of $3.4 billion mentioned in 2019. This increase could be due to labor shortages and rising material costs.
Las Vegas Sands, the parent company of Marina Bay Sands, maintains investment-grade credit ratings from major agencies, ensuring easy access to capital markets at favorable rates. This rating is crucial for attracting risk-averse investors interested in stable income.
In terms of finances, Sands boasts a strong balance sheet with $4.7 billion in cash and $4.4 billion available from a credit facility. The company plans to spend $1.5 billion this year, primarily on projects in Macau and Singapore, with 2025 expenditures expected to decrease to $1.15 billion.
Singapore Casino Expansion Vital for Future Success
The $9 billion loan for Marina Bay Sands will fund the construction of a fourth tower at the property, potentially yielding long-term benefits.
Marina Bay Sands is a highly valuable gaming brand and one of the most profitable venues globally. It remains LVS’s only property outside of Macau.
Strengthening Marina Bay Sands is essential for staying competitive as regional competition is expected to intensify with the opening of integrated resorts in Japan and Thailand in the coming years.