Shares of Las Vegas Sands soared last month when the company announced it had received an amendment to its .3 billion Macau credit facility that will give it more flexibility in responding to challenges and opportunities in Asia.
“This action represents an important step forward in our plan to maintain and improve liquidity,” said Chairman and CEO Sheldon Adelson. “The amendment significantly increases our financial flexibility and permits us to pursue a potential listing of a minority interest in our Macau operations on an Asian stock exchange.”
The company will pay a higher interest rate, but the repayment schedule is lengthened and it will have the opportunity to either sell individual operations or issue the long-expected IPO on its Macau properties. If the company successfully completes a sale and prepays $500 million of outstanding loans, the interest rate will drop. The amendment also includes the ability to issue senior secured or unsecured notes in Macau.
The deal includes six quarters of relief from loan covenants and allows it to sell a minority interest in its Macau operations.
The agreement may signal a shift on the general negative view of Macau in the last year. When Wynn Resorts and MGM Mirage suggested that they too could issue IPOs on their Macau operations, the market responded favorably.