Las Vegas Sands Eyes 3-Tranche Loan for Singapore Casino
In order to expand its Marina Bay Sands casino resort in Singapore, Las Vegas Sands (NYSE: LVS) is reportedly looking for a three-tranche loan for over $9 billion.
More information on the $8.9 billion loan, which would be the biggest corporate loan in Singapore's history, was revealed this week after it was first reported earlier this month. Bloomberg News was informed by unnamed people with knowledge of the situation that the loan might be divided into three components: a $560 million credit facility, $2.8 billion in term loans, and $5.6 billion in delayed-draw term financing.
The lenders promoting the loan include DBS Group Holdings Ltd., Malayan Banking Bhd., Oversea-Chinese Banking Corp., and United Overseas Bank Ltd. It is claimed that this consortium is looking to other banks for support.
The Marina Bay Sands credit is being offered to a wide range of institutional investors and is anticipated to have an annual interest rate of 120 basis points, the sources told Bloomberg.
Costs of Expanding a Casino in Singapore Rise
Sands' alleged $9 billion credit request came almost a year after rumors circulated that LVS was seeking $7.5 billion to expand and improve the Singapore integrated resort.
If the operator's borrowings for Marina Bay Sands total over $9 billion, that would be significantly more than the $3.4 billion LVS initially estimated in 2019. That can be a sign of limited labor supply and high material prices.
The holding company that owns Marina Bay Sands, Las Vegas Sands, has investment-grade credit ratings from all three main rating agencies, meaning it should have easy access to financial markets and be able to borrow money at reasonable interest rates. T hat investment-grade rating is also important when marketing the Singapore loan to risk-averse investors who desire income but do not want to take on junk-rated debt.
With $4.7 billion in cash on hand and $4.4 billion undrawn on a revolving credit facility, Sands has a solid financial sheet by gaming industry standards. This year, the business is anticipated to spend $1.5 billion, the most of which will go to Singapore's Marina Bay Sands and Londoner Macau. It is anticipated that spending will drop to $1.15 billion in 2025.
The Need for Singapore Casino Expansion
The development of a fourth tower at the famous resort will be financed by the approximately $9 billion Sands is seeking to borrow for the Singapore casino hotel. The investment may yield long-term benefits.
The gambling establishment is among the most lucrative of its kind, and Marina Bay Sands is one of the most valuable gaming brands in the world. At the moment, it is the only property in the LVS portfolio located outside of Macau.
From a competitive perspective, strengthening Marina Bay Sands is also crucial because, when integrated resorts in Thailand and Japan debut by the end of this decade, regional rivalry is probably going to get more fierce.
