The fall out from LVS’ highly leveraged position continued this week when Moody’s Investors Service downgraded USD7.4 billion worth of the group’s debt from B2 to B3.
In general terms any fall in corporate debt rating means money gets more expensive for a company in subsequent deals. The perceived increase in default risk has to be factored into the pricing of future arrangements.
“The downgrade is based on our expectation that Las Vegas Sands’ leverage will remain high despite the company’s successful November 2008 capital issuance, cost cutting initiatives, and reduction in capital expenditure plans,” stated Keith Foley, a Moody’s Senior Vice President.
Moody’s also affirmed LVS’ SGL-3 Speculative Grade Liquidity rating.
The rating concludes a review process that began in November last year.
