S&P unlikely to raise credit rating

Thursday, May 9, 2002 | 11:04 a.m.

Credit rating agency Standard & Poor's said Wednesday it is unlikely to assign a higher credit rating to Las Vegas Sands Inc., following the company's announcement of a $1.33 billion refinancing of its debt.

S&P said Wednesday that the credit ratings of Las Vegas Sands, owner of The Venetian hotel-casino on the Las Vegas Strip, remain on CreditWatch with negative implications. This designation, which raises the possibility of future downgrades, was imposed shortly after the Sept. 11 attacks.

The Venetian plans to sell $850 million in mortgage bonds and obtain a $480 million credit facility. The new debt will replace existing debt, on which The Venetian pays interest rates as high as 14.25 percent.

Improved ratings could lead to a significant lowering of these rates when The Venetian refinances. However, S&P gaming analyst Craig Parmelee said it is likely he will affirm The Venetian's credit ratings. The Venetian has a single-B corporate credit rating, considered a mid-level "junk" rating.

But Parmelee added he is also likely to move The Venetian to a "stable" outlook once the refinancing is complete, which would remove the immediate threat of downgrade.

"Standard & Poor's expects that the refinancing will improve The Venetian's financial flexibility by extending debt maturities, reducing amortization under the bank facility, and providing a financing mechanism for the Phase 1A (1,000-room) hotel expansion," an S&P statement said.