Jiuzhong Financial News, Sept. 9, S & P plans to issue senior note "BBB-" rating to Sands China Ltd. (Sands China Ltd, referred to as "Sands China Ltd.", 01928.HK) (the same as its long-term issuer credit rating). Sands China Ltd. intends to use the proceeds from the issue and existing cash to redeem the outstanding principal of his $1.8 billion high-end bill with a coupon rate of 4.6 per cent due in 2023, and pay any accrued interest and related full premium. S & P expects the deal to take the form of a debt-for-debt swap and improve the company's maturity by repaying most of the company's debt due in 2023. As a result, all other ratings (including the "BBB-" issuer credit rating) given by S & P to Sands China Ltd. and parent Las Vegas Sands (Las Vegas Sands Corp., for short "LVS") remain unchanged.
The "BBB-" issuer credit ratings of LVS and Sands China Ltd. reflect S & P's view that LVS could reduce its adjusted net leverage ratio below the rating downgrade threshold of four times by 2022. S & P estimates that by 2022, if the revenue and EBITDA of LVS Macau properties can rise from 15 per cent in 2021 to 60 per cent in 2019, and the revenue and EBITDA of Singapore casinos in 2022 will rise from 30 per cent in 2021 to 55 per cent in 2019, the company's combined leverage ratio could improve to less than 3.5 per cent next year.
S & P expects LVS to restore credit indicators in 2022 based on the following principles:
High quality asset portfolio
S & P expects its game market and assets to recover with the recovery of leisure, business and group travel.
It has performed well in the world's largest gaming market (Macao, China), which has good long-term growth prospects and limited licences, typically catering to a large number of tourists with a high preference for gambling.
Occupy a strong market position in Singapore's duopoly gaming market
S & P believes that given that the company's leverage ratio was less than twice that before the outbreak, and that S & P believes that LVS will give priority to restoring credit indicators and resuming dividend distribution, the company's financial policy will support the rating.
As of June 30, 2021, its strong liquidity is expected to be close to $6 billion, including revolving credit and cash balances, and S & P believes that asset sales gains on its Las Vegas properties in the fourth quarter of 2021 are expected to further enhance liquidity; and
Manageable expiration by 2022.
Nonetheless, the S & P rating outlook remains negative as S & P expects a slow recovery in the Asian market to lead to weak credit indicators by the end of 2021, but still above the S & P downgrade threshold, below which LVS leverage will return in 2022. Delta mutant virus has brought new uncertainty to the spread trajectory and economic impact of the COVID-19 epidemic, especially in view of China's zero tolerance policy towards the COVID-19 epidemic. If the virus is detected again in Chinese mainland or Macao, even a small number of cases could lead to a rapid blockade and sharp tightening of restrictions, which could hinder the recovery of the Chinese market in Macao. Although Singapore has changed its zero tolerance policy with the increase in vaccination rates and the reopening of transit policies, S & P expects the process to be gradual, with the rising number of new cases likely to delay policy recovery. If S & P no longer believes that LVS's EBITDA can support its recovery by improving the adjusted net debt-to-EBITDA ratio to less than four times in 2022, S & P may downgrade LVS.