Sands seeks to reduce loans’ interest margins

Wednesday, Feb. 2, 2005 | 9:08 a.m.

BLOOMBERG NEWS

Goldman Sachs Group Inc. and Scotia Capital are being asked to cut the interest margin on more than $1 billion in bank loans for casino-owner Las Vegas Sands Corp., according to a regulatory filing.

Las Vegas Sands, which raised $690 million by selling its own shares in December, is seeking to reduce the interest margin on the loans from 2.5 percentage points, the company said without specifying a target rate. A meeting to sell the loans will be held tomorrow at 2 p.m., said a person familiar with the situation who declined to be identified.

The casino operator also plans to sell $250 million in 10-year notes, the filing said. The company will use some of the money from the loans and the debt sale to repay mortgage-backed notes due in 2010 with an interest rate of 11 percent.

Las Vegas Sands is seeking $675 million more than its existing credit from Goldman Sachs and Bank of Nova Scotia. The interest margin on the existing, $1.01 billion loan is above the London Interbank Offered Rate, or Libor, the filing said.

Scott Henry, Las Vegas Sands' chief financial officer, didn't immediately return a call seeking comment.

The credit the company seeks consists of a $1.17 billion term loan maturing in 2011 and $400 million in revolving credit due in 2010, the company said today in a U.S. Securities and Exchange Commission filing.

Libor is a benchmark for short-term corporate borrowing, set daily. Three-month Libor was set today at 2.75 percent. Money in a revolving credit can be borrowed once it's repaid; in a term loan, it can't.

Standard & Poor's rates the company BB-, three levels below investment grade. Moody's Investors Service assigns a B3 rating, six levels short of investment grade.

Scotia Capital is a unit of Bank of Nova Scotia.