Las Vegas Sun

March 29, 2024

Outlook for Las Vegas Sands gets boost on Macau news

Updated Thursday, May 20, 2010 | 4:06 p.m.

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Las Vegas Sands CEO Sheldon Adelson.

Moody’s Investors Service lifted Las Vegas Sands Corp.’s outlook from negative to positive on Thursday — the same day the company cemented financing to proceed with a big expansion in the Chinese gambling district of Macau.

Moody’s, in boosting the debt rating outlook, said the change largely reflects the April 27 strong initial opening of Sands’ $5.5 billion Marina Bay Sands resort in Singapore.

"This provides us with a higher level of comfort that Marina Bay Sands will ramp up at a pace that will facilitate meaningful debt reduction and improve Las Vegas Sands’ geographic diversification," Keith Foley, Moody's senior vice president, said in a statement.

The positive outlook also considers Las Vegas Sands’ strong operating performance in Macau as well as the impact of cost savings initiatives that lifted EBITDA — earnings before interest, taxes, depreciation and amortization — in the first quarter. Moody’s said Las Vegas Sands also should benefit from the approval of table games in Pennsylvania, where the company has a casino in Bethlehem.

The Las Vegas-based company reported a loss of $28.9 million, or 4 cents per share, in the first quarter of 2010, compared to a loss of $80.9 million, or 12 cents per share, during the same period of 2009.

Net revenue for the first quarter was a record $1.33 billion, an increase of 23.7 percent from $1.08 billion in the first quarter of 2009.

Also today, Las Vegas Sands said its Asian subsidiary closed on $1.75 billion of financing for the development of projects with another 6,000 hotel rooms and gaming and convention components in Macau.

Sands China Ltd. said the money will be use to complete construction on the Shangri-La, Traders, and Sheraton resort complex at the company's Cotai Strip development.

"The completion of the Shangri-La, Traders, and Sheraton complex represents a critical next step in Macau's ability to both diversify its economy and further reach its potential as a full-scale leisure and business destination," Sheldon Adelson, chairman of Las Vegas Sands and Sands China Ltd., said in a statement. "The additional 6,000 hotel rooms are especially important in growing the meeting and convention business in Macau. The additional capacity will open up a new and larger base of potential customers who, because of the size of the events, were not previously able to bring their meetings or conventions to Macau."

Adelson said he expects the first phase of the development, which will feature approximately 3,700 hotel rooms and suites from the Shangri-La, Traders and Sheraton hotel brands and additional retail, gaming and meeting/convention facilities, to open in the third quarter of 2011. Phase two includes a 2,300-room Sheraton hotel tower, as well as other non-gaming amenities, and is expected to open approximately six months later.

Timing for the completion of a third phase, which includes plans for a St. Regis hotel and serviced-apartments, is to be announced later.

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