GGRAsia – Sands China gets waivers on US$2bln credit facility

Sands China gets waivers on US$2bln credit facility

Mar 30, 2020 Newsdesk Latest News, Macau, Top of the deck

U.S.-based casino operator Las Vegas Sands says its Macau unit, Sands China Ltd, has negotiated a number of amendments to the conditions of a US$2.0-billion loan facility it holds.

Sands China has an ongoing commitment to spend hundreds of millions of U.S. dollars on infrastructure in the Macau casino market. That market currently has witnessed a sharp fall in revenue amid the novel coronavirus pandemic, which has seen widespread restrictions regionally and globally on tourism and travel.

The revolving unsecured credit facility – that Sands China had agreed in November 2018 and which is available until July 31, 2023 – is with a number of banks, with Bank of China Ltd, Macau Branch, as agent for the lenders.

The newly-stated conditions also envisage the agent and lenders would “waive any default that may arise as a result of any breach of the requirements” even in the restated form.

The changes include: the lenders waiving the requirements for Sands China to ensure that its consolidated leverage ratio on the last day of any financial quarter not exceed 4 to 1; and that the consolidated interest coverage ratio on the last day of any financial quarter is greater than 2.5 to 1.

The lenders also agreed to “extend the period of time during which the company may supply the [lenders'] agent with its audited consolidated financial statements for the financial year ended on December 31, 2019; to April 30, 2020”; with a similar relaxation of the deadline to report the 2020 financial-year results – namely to April 30, 2021.

“Pursuant to the waiver letter, the company agreed to pay a customary fee to the lenders,” added the filing.

Sands China did not state in its Friday filing specific reasons for the amendments.

In mid-March Moody’s Investors Service Inc said it had placed Sands China and the latter’s parent under review respectively for possible credit-rating downgrades. Las Vegas Sands also runs the Marina Bay Sands casino resort in Singapore.

Moody’s had said the review for downgrade had been “prompted by steep declines in visitation and gaming revenue in Las Vegas Sands Corp’s Macau and Singapore operations, as a result of the spread of the coronavirus that has restricted travel in the region as well as [the] expected reduced travel, consumer and business activity in the U.S.”

Sands China had said in its unaudited annual results filed in Hong Kong on February 21, that as of December 31 last year, the firm held cash and cash equivalents of US$2.47 billion, “primarily generated” from its operations. Such cash and cash equivalents were primarily held in Hong Kong dollars and Macau patacas, the firm stated.

In late February another Macau casino operator, MGM China Holdings Ltd, confirmed to GGRAsia it had asked lenders to ease financial covenants related to a HKD9.75-billion (US$1.26 billion) credit facility, amid the negative impact on business wrought by the novel coronavirus associated with the Covid-19 disease.