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StumbleLas Vegas Sands to sell $600 million in bonds
Wednesday, Sept. 2, 2009 | 7:40 a.m.
Sun Coverage
Las Vegas Sands Corp. announced Wednesday plans to take on up to $600 million of debt that it can convert into equity once it completes a public stock offering on the Hong Kong Stock Exchange.
The company said the bond offering would improve its liquidity position.
The money will be used for general corporate purposes, including covering some of the company's Macau development costs.
The company, hurt like other leveraged gaming operators by the worldwide recession, lost $222.2 million or 34 cents per share in the second quarter ending June 30.
Interest costs on its $12.8 billion of liabilities -- including $10.6 billion in long-term debt -- totaled $64.8 million in the quarter. Preferred stock obligations cost it another $46.3 million, the company reported.
Besides its Macau casinos, the company has big resorts in Las Vegas, a casino in Pennsylvania and is preparing to open a megaresort in Singapore.
Las Vegas Sands stock opened higher Wednesday morning, trading at $13.67, up 22 cents.
The company called the $600 million bond sale "pre-IPO'' financing. The notes will pay 9 percent through September 2010. If notes are not converted to stock, the interest rate rises to 12 and then 15 percent through 2014.
"The completion of this financing, which we expect to occur in a matter of days, will enhance our current liquidity position and further our efforts toward reaching long-term financial stability," Las Vegas Sands Corp. Chairman and Chief Executive Sheldon Adelson said in a statement.
Las Vegas Sands President Michael Leven said in the statement that the pre-IPO financing is a component of the company's efforts to strengthen its financial position. Other components are the recent completion of an amendment to its $3.3 billion Macau credit facility and the submission of an application by a subsidiary of the company to be listed on the Hong Kong Stock Exchange.
"The actions we have taken in recent weeks, together with the right-sizing of our cost structure and our on-going efforts to implement efficiencies across our operations, have clearly helped to strengthen our balance sheet," Leven said in the statement.
"We will continue working to solidify our financial position while at the same time staying true to our long-term business strategy. Our company remains uniquely positioned to develop large-scale integrated resorts and to monetize the various non-core assets of those developments, such as retail malls and residential units, when economic and capital market conditions are appropriate," Adelson added. "This fundamental business strategy guides the planning and development of our current pipeline of projects and helps us evaluate future development opportunities as well. It also enables our company to de-lever more quickly than companies that rely largely on operations to do so, which is a key component in our ability to generate significant long-term value for our shareholders."
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What a bunch of BS! They are going to pay us 9% to go down with a sinking ship. When is the last time they made money. This is just another scheme to get a loan which u will never see the principal again. Don't fall for it! Let Adelson use his money.
Hey all, I am running a little short this month. Can I sell you some of my newly printed bonds, I will gladly pay you back on Tuesday.
I felt compelled to log into my stock site just to double check before I responded. The gains and losses tab tells me my LVS stock is up 159%. Thought I had this stuff figured out, but based on your feedback, I must be doing something wrong. Maybe I'll sell the crap and buy some of the old GM stock still floating around. I have to wonder what the average IQ of the compulsive uninformed blogger is.
The CEO in one article announces the recession in Casinos is over. The next article has him announcing a bond issue. The SEC should stop the sale and charge him for putting out false news releases to sell his bonds. This guy is just like the crew at CITI corp or BofA. Lie to the next set of investors. He cannot act like the President, lying to the public about economics is his job.
You would have to be very strongly bullish on the US economy recovery to buy these. A huge recovery is the only things that is going to save the LV casino industry.
The guy that made 159% on his investment must be Adelson's relative . The last I saw it depreciated over 200% from last year.
Depreciated 200%? That'd be a neat trick.
The most anything can depreciate is 100%, as an asset's value cannot go below zero.
If the stock peaked at 200 and is selling at 10 what kind of depreciation is it?
When is the gaming industry going to realize they are chopping there own heads off.Millions of dollars,if not billions, are being spent over seas on new resorts.While the casino industry here in Vegas and around the U.S.suffers.Go figure the greed has reach a new level of ignorance.Keep the the investing here in Vegas.Invest in coustomer service here.Use that money to gernerate jobs here and promte travel to Vegas from around the world. They build new resorts and they cut off the travel here.Stupid !!!!! To those who are not seeing a profit here in there investment and wondering why they are(the casino executives)are talking out the side of there necks.They have to keep there pay check comming in.The investment groups are not investing in Vegas they are investing in greed.They need to hault all futre overseas projects and start revitalizing Vegas and the Strip.Dont build new resorts just revamp/remodle the ones they have create jobs again and invest in bringing people/tourist here.Looks like commonsense to me but who ever said the big boys have commonsense
200 dollar stock drops to 10 dollars is a 95% drop
I bought LVS when it was under $2. As it approaches $15, I am quite happy - thank you very much.
The last block of LVS stock I purchased was 2,000 shares in March at $1.50 (should have held out a couple of hours). Anyway, based on today's price that particular chunk is worth a little over 10 times that, (sure it will probably go down in September and October). There are very few ways of getting back the billions spent in China and other Asian countries via Wal-Mart and other discount stores. Boeing aircraft just aren't selling, nor is their stock. More Buicks are sold in China than the US, but who has the courage to buy GM stock. My hat is off to Mr. Adelson and his team who as I understand it, manage the largest US investment in China via LVS and associated companies. I don't feel developing the Asian market constitutes greed, nor does it rob the US gaming market. Neither does taking a chance and making investment choices so my grand children can enjoy the benefits of a good education constitute greed.