S&P affirms credit ratings on LV Sands

Wednesday, March 8, 2000 | 11:16 a.m.

Standard & Poor's removed the Venetian and parent company Las Vegas Sands Inc. from CreditWatch, citing expectations that "positive operating trends will continue into the first quarter of 2000."

The Venetian had been placed on CreditWatch in August with negative implications -- meaning the agency had been considering downgrading the Venetian's bond ratings. S&P's move means the Venetian's corporate credit rating will remain at current levels.

The move affected the ratings on $805 million in outstanding debt.

S&P said the affirmation of the Venetian's credit ratings reflects the stronger fourth-quarter performance of the Venetian, which is expected to continue through the early part of this year. S&P noted the strength of the company's convention-oriented business model, the resort's good location on the Strip, its critical mass of restaurants and retail locations and high quality room product.

However, S&P still noted concerns over the company's "burdensome" capital structure, limited liquidity and litigation with contractor Lehrer McGovern Bovis. Because of these concerns, S&P's ratings outlook on the resort remains negative; however, the agency said this could be improved to stable by improved cash flows or the resolution of the Bovis lawsuit.

S&P currently assigns a corporate credit rating of "B" to the Venetian, a rating considered below investment grade.