Sands China completes US$1 billion term loan deal with parent company Las Vegas Sands – IAG

Macao concessionaire Sands China Ltd has entered into a loan agreement that will see its majority shareholder, Las Vegas Sands Corp, provide an unsecured term loan of $1 billion.

The loan, repayable on July 11, 2028, offers Sands China the option of paying interest in cash at 5% per annum for the first two years, or “interest in kind at 6% per annum by adding the amount of such interest to the then unpaid principal amount of the loan, after which only cash interest at 5% per annum will be payable,” the company disclosed on Monday.

The loan will be repayable in whole or in part at any time without penalty.

In a Hong Kong Stock Exchange filing, Sands China said the loan agreement “highlights both LVS and the company’s confidence in Macau’s long-term growth potential, and the availability of loan further strengthens the company’s balance sheet position and liquidity.”

The granting of the loan comes with a zero-income environment for Macau dealers, with casinos in Macau closed for seven days from July 11-18 and border restrictions with mainland China expected to remain in place in a foreseeable future.

It also follows a similar agreement between Wynn Macau Ltd and its US parent company Wynn Resorts for a US$500 million loan facility.

Morgan Stanley analysts recently suggested the Wynn loan was a sign Macau operators are now struggling to borrow from banks, with the impact of the COVID-19 pandemic now stretching well into its third year.

In a note released Monday evening, JP Morgan said the loan would extend Sands China’s liquidity track by six months for a total of 15 months (September 2023), even assuming zero cash burn income. pure without GGR.

“This, in our view, should be more than enough to weather this downturn, as we cautiously expect a significant travel policy easing to come into effect gradually from late 2022/early 2023,” wrote the investment bank.

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