Las Vegas Sands Submits Application for Mixed Shelf Offering

Posted on: November 3, 2023, 04:19h. 

Last updated on: November 3, 2023, 04:19h.

Las Vegas Sands (NYSE: LVS), the largest casino operator by market capitalization, has filed a Form S-3 with the Securities and Exchange Commission (SEC), suggesting that the company may be preparing to sell corporate securities.

Marina Bay Sands
The Las Vegas Sands-owned Marina Bay Sands in Singapore. The operator filed for mixed shelf offering today. (Image: Pinterest)

The Form S-3 is used by companies to declare mixed shelf offerings, including sales of common stock, corporate debt, depositary shares, options, preferred shares, and warrants.

While the filing does not specify the type of securities Las Vegas Sands will be issuing, it is unlikely to be preferred stock as the company is not a frequent issuer of this security. Introducing common stock would dilute current shareholders and potentially lead to a decline in the stock price. However, the company may consider issuing corporate debt, although high interest rates may pose financing challenges.

Although not explicitly mentioned in the Form S-3, Las Vegas Sands may be preparing to sell some form of corporate debt. However, potential bond issuers currently face higher financing costs due to the current high interest rate environment.

As of September 30, Las Vegas Sands had $5.57 billion in cash, one of the largest cash reserves in the gaming industry. The company also has access to a $4.17 billion revolving credit facility, while its debt stood at $14.17 billion.

Utilizing Capital from the Mixed Shelf

Las Vegas Sands has various options to deploy the capital raised through the mixed shelf offering.

According to the SEC filing, “We will use the net proceeds we receive from the sale of the securities offered by this prospectus for general corporate purposes, unless we specify otherwise in the applicable prospectus supplement.” These general corporate purposes may include construction projects, working capital additions, capital expenditures, debt repayment, financing potential acquisitions and investments, or stock repurchases.

During its third-quarter earnings report, Las Vegas Sands announced an increased share repurchase program of $2 billion, more than doubling the previous amount. This program will be active until November 3, 2025.

In the filing, Las Vegas Sands also mentioned the possibility of selling debt securities at a discount below their stated principal amount, with the potential issuance of additional debt securities without the consent of existing debt holders.

Potential Acquisitions Unlikely

Although Las Vegas Sands could potentially use the proceeds from the mixed shelf offering for an acquisition, it is currently unlikely. The company has not ventured into iGaming and online sports betting, and there are no rumors suggesting the sale of casino resorts in Macau, where Sands operates. Additionally, regulatory limitations in Singapore make it unlikely for Sands to control both integrated resorts in the city-state, as it currently does.

For now, it remains speculative, but Las Vegas Sands may allocate some of the proceeds from the mixed shelf offering towards its bid for a casino in the New York City area.

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