Sands is facing liquidity issue?

[Death Nail]

Wednesday October 1, 4:05 pm ET  
S&P keeps Las Vegas Sands ratings under review for possible downgrade


PHILADELPHIA (AP) -- Standard & Poor's Ratings Services is keeping Las Vegas Sands Corp.'s ratings under review for potential downgrade in spite of a $475 million cash infusion into the hotel and casino operator.

 
Billionaire Sheldon Adelson said Tuesday that he was buying convertible senior notes due October 2013 in a private transaction to avoid violating lender covenants. The debt pays an interest rate of 6.5 percent and convert into common shares at a price of $49.65.

S&P said the $475 million investment addresses short-term concerns about liquidity.

But the ratings agency remains concerned about the Las Vegas-based company's overall liquidity position, continued weak performance on the Las Vegas Strip and a possible "significant" slowdown in the Chinese gambling enclave of Macau.

At the same time, S&P noted, the company wants to borrow a lot of money for developments.

Shares of the company fell $4.79, or 13.3 percent, to close at $31.32, after earlier touching a low of $30.11, a level not seen since October 2005.

[Death Nail]

Las Vegas Sands sinks on analyst downgrade
AP
Posted: 2008-10-02 19:25:52
PHILADELPHIA (AP) - Shares of Las Vegas Sands Corp. fell Thursday after an analyst downgraded the stock due to concerns about slowing growth in Las Vegas and new visa restrictions in Macau, a Chinese gambling enclave where the company has properties.

The stock fell $4.81, or 15.4 percent, to $26.51. Shares hit a new 52-week low of $25.30 earlier in the session.

Celeste Mellet Brown of Morgan Stanley downgraded the stock to "equal weight" from "overweight" and removed her $88 price target for the shares. Any improvement or deterioration in cash flow, given the company's existing and future debt levels, can have a "significant" impact on the stock price, she said.

Brown believes gaming revenue growth will be weak in Macau given the Chinese government's new limits on visitation - granting one visa every three months from once every two months.

She said U.S. group bookings are weakening and will affect the company's properties in Las Vegas. While bookings of larger conventions are firm, fewer bookings and higher cancellations of smaller groups will affect overall convention business.

Brown also noted that Las Vegas is more vulnerable than other cities to cuts in airline flights because of its reliance on visitors arriving by air.

The analyst said she believes the company's billionaire chief executive, Sheldon Adelson, will continue to support funding needs of the business.

But the Las Vegas-based hotel and casino operator still needs to raise about another $1.4 billion to get it through 2009, in the midst of the credit market crisis.

On Tuesday, Adelson disclosed that he bought $475 million in convertible notes of his own company to avoid violating lenders' covenants in the third quarter that would have made it tougher to get financing for projects in Macau.

Las Vegas Sands' properties include the Venetian Resort Hotel Casino in Las Vegas and Venetian Macau in China.

[travel visa curbs]

Visa Curbs Stall Macau’s Casino Boom

First revenue drop in 3 years

Neil Gough
6 October 2008

Macau’s booming casino revenue growth came to a sudden halt last month as Beijing’s crackdown on visits by mainlanders to the city threatens to derail six years of post- liberalisation gaming expansion.

Monthly casino revenue fell for the first time in nearly three years to 6.9 billion patacas, down 3.4 per cent from a year ago and 28 per cent from the previous month, according to unofficial data reported at the weekend by Portuguese news agency Lusa.

September’s year-on-year contraction in gaming revenue comes in stark contrast to average monthly growth of 52.5 per cent in the first eight months of the year and was Macau’s smallest monthly takings in 13 months.

The sharp fall-off comes after Macau’s secretary for the economy and finance, Francis Tam Pak-yuen, said last week that Macau’s economic growth could come in at just 10 per cent this year despite soaring 26 per cent in the first six months.

Casino revenue accounted for 60 per cent of Macau’s gross domestic product in the year to June and Mr Tam’s forecast implies there will be a 36 per cent decline in gaming revenue between September and December compared with the same period last year.

Since June, the central government has been reducing the ease and frequency with which mainland passport holders, including non-permanent Hong Kong residents, can travel to Macau.