Moody’s Investor Service has warned that the credit profile of Las Vegas Sands (LVS) could be negatively impacted should the company invest heavily in further international expansion efforts or by the inevitable resumption of dividends in the near future.
In an update to the company’s credit analysis published this week, Moody’s noted that its current credit profile – comprising a long-term “Baa3” rating with a Stable Outlook – is supported by the “high quality, popularity, and favorable reputation of its casino properties and positive long-term gaming demand trends in LVS’s geographic markets.”
LVS operates Marina Bay Sands in Singapore, which Moody’s notes has property-level EBITDA margins greater than 50% during normal operating periods, and is also the largest operator in Macau thanks to its majority holding in concessionaire Sands China.
However, the ratings agency also observed that, with the 2023 sale of the company’s Las Vegas assets, LVS is now less diverse and wholly reliant on the Singapore and Macau operations.
“Key credit concerns include the likelihood that LVS will continue to pursue further and significant global casino resort development opportunities that will likely be funded largely with debt that could lead to temporary leveraging,” it said.
“In addition, the likelihood that LVS will return capital to shareholders in the form of share repurchase and dividends as operations have ramped back up remains a credit constraint.”
LVS has made no secret of its interest in winning casino licenses in Thailand, where the passing of casino legislation appears imminent, and New York where the RFP process is now well underway.
The company earlier this week announced a new US$1.5 billion revolving credit facility, to be used to strengthen its working capital and support general corporate needs.
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