Gaming briefs for June 25, 2004

Friday, June 25, 2004 | 10:40 a.m.

State Senate OKs casino plan

PROVIDENCE, R.I. -- Voters would decide whether an Indian casino should be built in West Warwick under a bill approved by the Senate Thursday night.

The 23-11 vote moves the bill to the House, which is expected to consider it today. The proposal advanced quickly through the General Assembly this week after Harrah's Entertainment sweetened its offer to the state. The company and its tribal partner agreed to a higher maximum tax rate and to paying a $100 million licensing fee over three years, instead of 10.

Debt rating agency raises Venetian rating

Standard & Poor's Ratings Services has raised its corporate credit rating on Las Vegas Sands Inc. and its subsidiary, the Venetian Casino Resort LLC, to B+ from B.

Also, S&P raised its rating on the company's $850 million 11 percent mortgage notes due 2010 to B from B-. Both ratings were removed from CreditWatch where they was placed on April 13.

The ratings still reflect a non-investment grade, or "junk bond," status.

The upgrade reflects the "good operating results" at The Venetian hotel-casino in Las Vegas over the past several quarters, in part because of the June 2003 opening of the Venezia hotel tower, S&P analyst Michael Scerbo said. The trend is expected to continue at the resort "given the positive momentum in Las Vegas," he said.

The ratings also reflect the company's cash position following the sale of its Grand Canal Shoppes mall at The Venetian for $766 million and the expectation that the company will finance its planned resort adjacent to The Venetian in such a way as to maintain its current debt ratings, S&P said.

The company's existing bank loan continues to have a B+ rating and remains on CreditWatch with positive implications, which means it could be revised upward.

S&P said it anticipates that the bank loan may be refinanced as a means of funding a portion of the company's upcoming capital spending initiatives.

The company's total debt outstanding at March 31 was about $1.4 billion.