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10 May 2002
MOODY'S ASSIGNS B2 TO VENETIAN CASINO'S NEW $375 MIL. SECURED BANK FACILITY AND Caa1 TO $850 MIL. SECOND MORTAGE NOTES; RATINGS OUTLOOK CHANGE TO STABLE FROM NEGATIVE EXPECTED ONCE TRANSACTION CLOSES
New York, May 10, 2002 -- Moody's Investors Service assigned the following new ratings to Las Vegas
Sands, Inc. and Venetian Casino Resorts, LLC (co-issuers):
- $75 mil. senior secured revolving credit facility
due 2007- B2
- $300 mil. senior secured term loan B due 2008 -
- $850 mil. second mortgage notes due 2010 -
The following ratings were confirmed:
- Senior implied rating at B3
- Long-term senior unsecured issuer rating at Caa2
Proceeds from the new notes and new bank credit facility will be used
to repay all of the company's outstanding debt and fund the Phase 1A addition
that was put on hold after Sep. 11, 2001. Upon successful
completion of the refinancing, Moody's expects to change the company's
ratings outlook to stable from negative and remove the existing ratings
on the company's 12.25% mortgage notes due 2004 (Caa1),
14.25% senior subordinated notes due 2005 (Caa3),
and existing senior secured bank credit facility (B2).
The ratings take into account the single property nature of the company
as well as the impact that the events of Sep. 11, 2001 had
on Venetian's gaming revenues and RevPar. The ratings also consider
the company's considerable pro forma leverage that is affected by the
pre-funding of the Phase 1A tower project. Pro forma debt/EBITDA
will be over 7.0x compared to slightly over 6.0x for the
twelve-month period ended Mar. 31, 2002.
The ratings also acknowledge the high quality of Venetian's casino property
and strong advanced booking trends related to the company's conference
business. Additionally, the ratings consider that Las Vegas
continues to be one of the largest entertainment markets and most popular
trade show destination in the U.S. despite difficulties
created by the Sep. 11, 2001 tragedy.
The expected change in ratings outlook to stable from negative once the
proposed refinancing is complete acknowledges that Venetian's cash flow
and liquidity profile should improve over the next few years as FF&E
related scheduled principal repayments and FY2004 and FY2005 scheduled
long-term debt maturities are eliminated. While the new
notes will increase overall leverage, it does provide funding for
the Phase 1A tower project which Moody's believes has a good risk/reward
profile. The expected change in ratings outlook also reflects the
company's gradual improvement in RevPar and cash flow performance as well
as overall gaming industry trends. Although Venetian's RevPar and
cash flow results have not yet returned to pre-Sep. 11,
2001 levels, improving travel trends combined with the company's
effective cost cutting are expected to support creditor protection measures
consistent with the current rating.
Las Vegas Sands, Inc. is a hotel, gaming and retail
mall company headquartered in Las Vegas, Nevada, which owns
and operates The Venetian Casino Resort and The Grand Canal Shops located
on the Las Vegas Strip.
Corporate Finance Group
Moody's Investors Service
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
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