Las Vegas Sands Corp. (LVS), the controlling shareholder of Sands China Ltd, has issued a $1bn loan to support the working
capital and general corporate purposes of the group.
The loan itself is pre-payable by Sands China Ltd in whole or in part at any time without penalty. The terms of the loan span from July 11, 2022, to July 11, 2028.
In more detail: in the first two years from July 11, 2022, Sands China will have the option to elect to pay cash interest at 5% per annum or payment-in-kind interest at 6% per annum by adding the amount of such interest to the then-outstanding principal amount of the loan, following which only cash interest at 5% per annum will be payable.
The agreement between the two is said to highlight both LVS' and the company’s confidence in the long-term growth potential of Macao.
At the date of the announcement, LVS beneficially owns approximately 70% of the issued share capital of Sands China Ltd.
It was revealed that Macau casino shares dropped along with dollar bonds on Monday, as the gambling hub shut almost all business premises, including gaming venues, to try and contain its worst-ever Covid-19 outbreak.
Sands China Ltd. shares fell 8.2% as the city reported 59 new cases on Sunday, bringing the total number of infections in the latest outbreak starting June 18 to 1,526.
Revenue from Macau casinos accounts for 80% of government income. Since March, gaming revenue has fallen more than 50% every month due to a reduction in visitors.
The loan issued by LVS will likely be used to support the Sands China location during the duration of the closures.
