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Las Vegas Sands to Talk With Banks in July
Las Vegas Sands (LVS) which won the bid to build Singapore's first ever casino resort is set to hold talks with banks in July to discuss the financing plans for the said project according to sources. The project cost is estimated at around $3.2 billion.
In May, Sands won the deal to build the casino resort in Singapore with its S$5-billion bid, outbidding a consortium led by MGM Mirage (MGM), another led by Harrah's Entertainment Inc. (HET) and a third led by Malaysian gaming concern Genting International Plc (G13.SG).
The talks might stress on a long term financing loan, revolving credit and the possibility of a floating rate note along the lines of United States currency debt that the Las Vegas Sands sold for Macau's Venetian in 2003, sources told Dow Jones Newswires. U.S. banks, including Citigroup (C), Lehman Brothers and Goldman Sachs Group Inc. (GS) are likely participants in the discussion. According to bankers, the financing deal is very likely to similar to the fundraising scheme done with the Venetian in Macau.
The race to getting the deal is becoming more heated now that the number of banks discussing financial offers with Las Vegas Sands has risen to twelve from the original nine, the sources say.
Two subsidiaries of Las Vegas Sands secured a $2.5-billion senior secured credit facility with Goldman Sachs Credit Partners L.P., Lehman Brothers Inc., with Citigroup acting as co-syndication agents, joint lead arrangers and joint bookrunners in late May. It consisted of a $1.2-billion funded term B loan, a $700-million delayed draw term B loan, a $100-million local currency term loan and a $500-million revolving credit facility. According to a banker, it is likely that in the Singapore case the bulk of the financing will be in U.S. dollars. He said most banks are coming up with independent proposals as opposed to syndication.
Also in May, chief operating officer of the group William Weidner said that Las Vegas Sands has not yet come up with an official plan for the funding of the $3.2 billion Singapore project. The company at the end of 2005 still has a withstanding accountability of $2.27 billion, of which long-term debt stood at $1.625 billion, according to its annual report. First quarter of 2006 saw the Las Vegas Sand's net income at $121.8 million from the previous year's 7.1 million which included a $132.8 million charge for early retirement of debt.
The casino resort will be built on a waterfront site in Singapore's downtown city area. Part of the agenda is to boost the country's economy through tourism and other service sectors that the casino resort might bring in. Las Vegas Sands is also in the midst of an aggressive expansion plan in Asia.