Las Vegas Sands Corp. has secured a $2.5 billion financing package to fund
its gaming projects in Macau. Analysts consider the loan, which comes from
six different banks, to be the largest single credit facility ever given to
a nongovernment entity in China. The loaned money will be used to fund an
expansion of the casino at the existing Sands Macau and for construction of
the $3 billion Venetian Macau, now under construction on Cotai, which is
just minutes south of Macau by car. The Sands expansion is expected to
finish this year; the Venetian Macau is scheduled to open in 2007. A portion
of the money also will be used to build a 400-room Four Seasons hotel
adjacent to the Venetian Macau.
“The primary purpose (of the loan) was the Venetian Macau, but this goes a
long way toward our financing initiatives in China,” Las Vegas Sands Chief
Financial Officer Scott Henry said this week.
The loan package consists of a $1.2 billion seven-year term loan, a $700
million six-year term loan, a $100 million five-year term loan and $500
million in a five-year revolving credit line.
Las Vegas Sands, through company Chairman Sheldon Adelson, is directing
development of the Cotai Strip. The company controls seven land parcels on
Cotai and has encouraged some of the world’s largest hotel companies to open
locations on the developing area.
North American hotel companies, such as Hilton, Starwood and Four Seasons,
will join Asian hotel company Shangri-La to bring some of the world’s most
recognizable brands — Sheraton, St. Regis, Intercontinental, Conrad and
Holiday Inn — to Cotai.
Las Vegas Sands will build the hotel projects. The hotel operators will
manage their own rooms and restaurants while Las Vegas Sands will run the
properties’ casinos and showrooms.
By decade’s end, Cotai is expected to be home to more than 20,000 hotel
rooms, casinos, showrooms, restaurants, convention space, retail and a
15,000-seat sports arena.
The loan deal was signed last week, the same day the Singapore government
awarded Las Vegas Sands the rights to build a $3.6 billion casino and resort
in the city-state.
Henry said the company filed a form 8-K with the U.S. Securities and
Exchange to announce the loan package, so the deal wouldn’t compete with the
Singapore casino announcement.
Goldman Sachs Credit Partners was the leading financial institution on the
loan and was joined by Lehman Bros., Citigroup Global, Bank of Nova Scotia
in Canada, Banco Nacional Ultramarino from Portugal and Japan’s Sumitomo
Mitsui Banking Corp.
The Standard, a Chinese business newspaper, reported that Las Vegas Sands
spent six months seeking banks willing to fund its concept of transforming
Macau into a convention and resort destination.
Henry said Citigroup is making its initial entry into the Chinese gaming
market.
Citigroup managing director Evan Ladouceur said the financial institution
believes in what Las Vegas Sands is trying to do in China.
“This is the first transaction in Macau for Citigroup, but we have a lot of
respect for Las Vegas Sands and their execution in Macau and on Cotai.
Meanwhile, Las Vegas Sands may have no trouble financing its Marina Bay
Sands in Singapore. According to a story in the International Herald
Tribune, the company has received between six and nine lending proposals for
the project, which includes a 2,500-room hotel, 1 million square feet of
convention space and 1 million square feet of retail.
Several of the same banks financing Las Vegas Sands in China have offered to
participate in Singapore.
Las Vegas Sands President Bill Weidner said the company would finance the
project without the Singapore government’s help.
On Thursday, Las Vegas Sands shares closed at $70.95 in trading on the New
York Stock Exchange, up 34 cents or 0.48 percent.
