LVS Selling Notes to Refi $500M in Debt, Possibly Repurchase Stock

Posted on: April 30, 2025, 04:16h. 

Last updated on: April 30, 2025, 04:16h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Casino operator will refinance $500 million of old debt
  • Some proceeds could be used to buy back stock
  • Offering not officially priced as of yet

Las Vegas Sands (NYSE: LVS) filed a prospectus with the Securities and Exchange Commission (SEC) indicating it will sell senior corporate notes to refinance $500 million of debt maturing in June.

Macau casino revenue GGR China
Sands China’s Parisian Macau on the Cotai Strip. Las Vegas Sands is selling senior notes to refinance old debt and possibly repurchase shares. (Image: Nana Jover)

The regulatory document doesn’t include pricing and interest rate details, but it’s expected a portion of the proceeds will be used to refinance $500 million worth of 2.90% senior unsecured bonds coming due in June. Sands also noted some of the proceeds could be used to fund share buybacks.

We intend to use the net proceeds from this offering, together with cash on hand, to (i) redeem in full the outstanding $500 million 2.900% Senior Notes due June 2025 (as defined herein) and any accrued interest, (ii) pay transaction-related fees and expenses and (iii) for general corporate purposes, which may include repurchases of LVSC’s common stock under the existing authorization by LVSC’s board of directors,” according to the prospectus.

When Sands delivered first-quarter results a week ago, the company told investors the board of directors authorized boosting the size of a previous share repurchase program to $2 billion from the $1.1 billion remaining on it.

Sands Not Strained by Debt Sale, Says Fitch

Across multiple industries, including gaming, it’s common for companies to issue new bonds to refinance or retire debt with imminent maturities. It’s an efficient avenue for issuers to extend their maturity profiles while potentially reducing interest expenses.

Specific to Sands, it doesn’t appear as though the upcoming note sale will strain its balance sheet. Fitch Ratings notes the operator had earnings before interest, taxes, depreciation, and amortization (EBITDA) leverage of 3.4x at the end of last year and maintaining or improving upon that ratio over the next year to two years could lead to a rating upgrade.

“Fitch believes LVSC is committed to managing its balance sheet to uphold investment-grade ratings,” notes the research firm. “The company has a solid track record of clearly communicating its leverage policy and maintaining prudent balance sheet management. Management targets a gross debt ratio of 2.0x-3.0x before development project impacts.”

The ratings agency applied a grade of “BBB-“ to the note sale with a “stable” outlook. Fitch added the gaming company is generating cash flow that is adequate enough to cover its shareholder rewards plans.

Sands Credit Profile Favorable Relative to Rivals

Las Vegas Sands overall credit rating is “BBB-“, which compares favorably to rivals such as MGM Resorts International (NYSE: MGM) and Wynn Resorts (NASDAQ: WYNN), both of which Fitch grades “BB-“, or junk grades.

Fitch lauded Sands for prudent management of its balance sheet in the period following the coronavirus pandemic, which prompted the operator to suspend its dividend.

“Positively, the company took prudent steps to manage its balance sheet during the ongoing operating stresses caused by the pandemic,” concludes the ratings agency. “This included halting shareholder returns as operating cash flows declined and a public commitment not to resume them until cash flows stabilized at a level commensurate with growth.”