Las Vegas Sands Seeking $9 Billion Loan for Singapore Expansion

Se dice que Marina Bay Sands, perteneciente a Las Vegas Sands (NYSE: LVS), está buscando un préstamo de $9 mil millones para financiar sus planes de expansión en el prestigioso complejo de casino en Singapur. 

If the operator secures financing at or near that figure, it will represent the largest corporate credit expansion in Singapore in recent years. Bloomberg News was informed by unidentified sources familiar with the situation that DBS Group Holdings Ltd., Malayan Banking Bhd., Oversea-Chinese Banking Corp., and United Overseas Bank Ltd. are collaborating on the loan and are looking for support from additional financial institutions. 

The sources indicated that the loan would span a duration of seven years, although details like interest rates were not disclosed. Las Vegas Sands, the parent of the holding entity that oversees Marina Bay Sands, possesses investment-grade credit ratings from the three primary rating agencies, but only by a single notch. 

In an October report, Moody’s Investors Service mentioned that the operator may continue seeking additional major global casino resort development prospects, likely financed primarily through debt, resulting in short-term leveraging. The Singapore loan seems to meet that requirement, but Moody’s also recognized that Sands’ cash flow to net debt ratio may rise to 33% in the next 12 to 18 months, noting that the gaming firm has the financial means to uphold its dividend and share buyback plan. 

Costs for Expanding in Singapore Aren't Inexpensive 

The news about Marina Bay Sands possibly seeking $9 billion in credit came almost a year after earlier rumors emerged that LVS was pursuing $7.5 billion to improve and expand the Singapore integrated resort. 

The firm rejected the 2023 report and has not yet provided a comment on the recent article regarding the issue. Nonetheless, it is evident that limited labor availability and worldwide materials shortages are expected to lead to increased expansion costs in the city-state. Initially, the MBS expansion, which includes additional guest rooms, convention and meeting areas, along with a 15,000-seat entertainment venue, was projected to cost $3.37 billion. 

Sources informed Bloomberg that should Marina Bay Sands secure a loan, part of the funds would be used to refinance a $2.98 billion debt from 2019, while the rest would be allocated for expansion. This suggests that expenses for enhancements at the property haven't risen substantially over the last year. 

If the loan is prolonged, it would become the largest syndicated financing ever in Singapore, surpassing the record established in 2012 by Thai billionaire Charoen Sirivadhanabhakdi, whose conglomerate purchased a Singaporean consumer staples firm. 

MBS Investments Have the Potential to Yield Dividends 

Although expanding MBS won't be cheap, these costs could provide the operator and its shareholders with a favorable long-term return on investment. The location is one of only two integrated resorts in Singapore, and it ranks among the most lucrative casino hotels globally, attracting tourists from all over Asia. 

The aspect of tourism is significant as competition among regions is growing. The completion of MBS expansion is anticipated by 2031. Prior to that, MGM Osaka is anticipated to launch, and multiple casino hotels may be operational in Thailand. 

At present, Singapore ranks as the world's third-largest gaming market in terms of gross gaming revenue (GGR), yet some analysts think Thailand may eventually assume that position due to its plans to permit more casinos.