Las Vegas Sands Corporation (LVS) has announced its intention to infuse up to $600 million of capital through the sale of exchangeable bonds to strengthen up its balance sheet prior to the scheduled Hong Kong initial public offering (IPO) of its subsidiary.

The bonds will be compulsorily exchanged into common stock of its Macau unit after the unit’s pending IPO on the Hong Kong Stock Exchange. The bonds will mature on September 4, 2014, according to a filing with the Securities and Exchange Commission, for which Goldman Sachs (GS) is the banker.

This pre-IPO financing is a part of Las Vegas Sands’ current efforts to strengthen its financial position. Recently, the company has amended its $3.3 billion Macau credit facility. The amended agreement would enable it to sell a minority interest in its Macau operations for bolstering cash. Senior secured or unsecured notes can also be issued by Las Vegas Sands in Macau.

Las Vegas Sands is creating the Cotai Strip, a master-planned development of resort-casino properties in Macau. The project will feature approximately 21,000 rooms from renowned hotel brands such as St. Regis, Sheraton, Shangri-La, Traders, Hilton, Conrad, Fairmont, Raffles, Holiday Inn and InterContinental.

Las Vegas Sands maintains a robust development pipeline, with projects in Macau, Las Vegas, Singapore and Pennsylvania.  In fact, the company is exposed to Las Vegas and Macau, two of the most dynamic gaming markets in the world. Additionally, these capital bolstering initiatives coupled with cost-containment measures augur well going forward.

Zacks Investment Research
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