Las Vegas Sands Corp. (LVS, Financial) has announced that its subsidiary, Sands China Ltd., has entered into a new credit facility agreement, known as the 2024 SCL Credit Facility. This agreement, effective from October 23, 2024, replaces the previous 2018 SCL Credit Facility and aims to bolster Sands China's financial flexibility and support its corporate and working capital needs.
The 2024 SCL Credit Facility comprises a HKD 19.50 billion (approximately $2.51 billion) unsecured revolving credit facility and a HKD 12.95 billion (approximately $1.67 billion) unsecured term loan facility, both denominated in Hong Kong dollars. The revolving facility allows Sands China to draw loans until September 24, 2029, with a final maturity date of October 23, 2029. The term loan facility is available for drawdown until August 31, 2025, specifically for repaying outstanding amounts under Sands China's 5.125% Senior Notes due August 2025.
Interest rates for the loans under the 2024 SCL Credit Facility are tied to the Hong Kong interbank offered rate, with an initial margin of 2.50% per annum for the revolving facility and 1.65% per annum for the term loan facility. Additionally, Sands China is obligated to pay a commitment fee of 0.60% per annum on undrawn amounts, along with other customary fees.
The agreement includes standard covenants and conditions, such as limitations on secured indebtedness, sale and leaseback transactions, and dividend restrictions. It also mandates Sands China to maintain specific financial ratios, including a maximum leverage ratio and a minimum interest coverage ratio. Furthermore, the facility outlines events of default, particularly concerning Sands China's gaming operations and land concession contracts.
This strategic financial move by Sands China, under the guidance of Las Vegas Sands Corp., is designed to ensure robust financial health and operational flexibility, positioning the company for sustained growth and stability in the competitive gaming and hospitality industry.
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