Home > Finance > Las Vegas Sands lends $1bn to Sands China following Macau lockdown

Las Vegas Sands lends $1bn to Sands China following Macau lockdown

| By Zak Thomas-Akoo
Macau integrated resort developer Sands China has announced that it has entered into a loan agreement with its parent company, Las Vegas Sands (LVS), following the recent announcement of a new lockdown in the special administrative region.
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Sands China released the information in a press release to investors, detailing the terms of the subordinated unsecured term loan. The amount is $1bn (£845m/€998m), lent on 11 July 2022 to be repayable on 11 July 2028.

In the first two years of the agreement, Sands China will have the option of either paying cash interest at 5% annually or payment-in-kind interest at 6% annually by adding the amount of such interest to the then-outstanding principal amount of the loan. Following those two years, only cash interest will be payable.

In February, S&P downgraded LVS’s bonds to BB+, below investment grade; meaning that credit from alternative sources may be hard to find for the subsidiary. Currently LVS owns 70% of the issued share capital of Sands China.  

LVS stated that the loan was provided in order to support the “working capital and general corporate purposes of the group”.

Left unstated was the difficult business environment for the sector in Macau, with the government of the special administrative region only yesterday announcing the closing of the city’s casinos in the face of a rising Covid-19 case count.

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