Las Vegas Sands’ majority-owned subsidiary Sands China has completed a $1 billion bond sale to refinance debt and support its business, including capital spending. The financing replaces some existing borrowing with notes due in 2032 and 2033, at interest rates well above the 2.3% coupon on the $700 million of 2027 notes Sands China plans to redeem.
Key details
- Sands China issued $700 million of notes carrying a 6.4% annual interest rate and maturing January 8, 2032, plus $300 million of notes carrying a 6.7% rate and maturing November 8, 2033.
- Interest is payable twice a year. Payments on the 2032 notes begin January 8, 2027; payments on the 2033 notes begin May 8, 2027.
- Sands China plans to use the proceeds, together with cash on hand, to redeem all of its $700 million of 2.3% notes due in 2027, repay the outstanding balance on its revolving credit facility, and fund general corporate purposes, including capital expenditures.
- The notes are direct, senior unsecured obligations of Sands China. They rank equally with its other senior unsecured debt, but are not guaranteed by its subsidiaries. They rank behind claims secured by the assets backing any future secured debt and behind liabilities at Sands China’s subsidiaries.
- Sands China can redeem the notes early. Before December 8, 2031, it can redeem the 2032 notes at principal plus a make-whole premium; after that date, it can redeem them at par. The corresponding dates for the 2033 notes are September 8, 2033, with a make-whole premium applying to earlier redemptions.
- If specified change-of-control events occur, Sands China must offer to buy back the notes at 101% of principal, plus accrued interest. Other specified events can require a repurchase offer at 100% of principal, plus accrued interest and any additional amounts.
- The bond terms restrict certain actions, including granting liens, entering sale-and-leaseback transactions, and selling or combining substantially all of Sands China’s assets, subject to exceptions.
- The notes were privately placed with institutional and other eligible investors and are to be listed in Hong Kong.
What changes for investors
Sands China is extending the maturity of the debt it plans to refinance, while taking on new notes with substantially higher coupons than the 2027 bonds being retired. The proceeds are also intended to reduce its revolving-facility balance and support capital expenditures. The filing does not specify how much of the new borrowing will go to each use, so the overall change in interest expense or debt levels cannot be determined from the stated terms alone.