Sands China Ltd has entered into a waiver extension with one of its lenders, Bank of China Limited, Macau Branch, that will see the waiver period for certain covenants under a US$2 billion revolving credit facility agreement extended until 1 January 2022.
The extension relates to a previous waiver agreement signed in March of this year in which the two parties agreed to waive the requirement for Sands China’s Consolidated Leverage Ratio to not exceed 4.00 to 1.00, and for its Consolidated Interest Coverage Ratio to be greater than 2.50 to 1.00, as of the last day of any financial quarter from 1 January 2020 to 1 July 2021.
The new agreement extends that waiver for a further six months, while also providing Sands China with the option to increase its commitments by up to US$1 billion. However, it also imposes a restriction on the ability of Sands China to declare or make any dividend payment or similar distribution at any time until 1 January 2022 should its total commitments under the facility agreement exceed US$2 billion.
Sands China stated in its announcement that, “Holders of our Company’s securities, potential investors and readers are advised to exercise caution in dealing in securities in our Company.”
The waiver agreement is the latest in a series of moves by Sands China, alongside other Macau concessionaires, to boost liquidity due to the impact of COVID-19, including a US$1.5 billion bond offering in June.
With Macau’s borders closed for most of the year, the company recently reported a loss of US$549 million for the three months to 30 June 2020, down from a net income of US$511 million in 2Q19.
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