Shares of casino operator Las Vegas Sands Corp. (LVS) reached a 52-week high of $74.94 on Wednesday, Dec 4, 2013 after a credit rating upgrade by Standard & Poor.
Standard & Poor upgraded Las Vegas Sands’ corporate rating to BBB- from BB+ with a stable outlook, which implies no upgrades or downgrades in the near term. The rating agency upped its view on the expectation that the company would maintain low debt levels for the next few years, which would keep its liquidity position stable.
The credit rating agency has in fact issued a BBB- issue-level rating to Las Vegas’ proposed $750 million revolving credit facility and $2.5 billion term loan. On Dec 2, 2013, the company announced that it intends to launch a proposed refinancing of its U.S. Restricted Group credit facilities. Barclays Capital, a unit of Barclays PLC (BCS), Citi, a unit of Citigroup, Inc. (C), The Goldman Sachs Group, Inc. (GS), Bank of America Merrill Lynch, BNP Paribas SA and Scotia Bank have been hired to arrange the re-financing.
Moreover, the rating agency has also raised its rating on Las Vegas Sands' Macau senior secured credit facilities to BBB- from BB+.
As of Sep 30, 2013, the company had $45.5 million of available borrowing capacity under the senior secured credit facility, net of outstanding letters of credit. Cash and cash equivalents was $3.2 billion, up from $2.5 billion as of Jun 30, 2013.
The company’s share price has mostly increased ever since it reported impressive third quarter earnings on Oct 17, 2013. Quarterly earnings grew 78.3% year over year and beat the Zacks Consensus Estimate of 75 cents by 9.33%. Revenues also beat the Zacks Consensus Estimate of $3.6 billion by 3.2% and increased 31.7% year over year, led by the company’s solid Macau business and improving prospects in Singapore and Las Vegas. Year to date, the company has posted positive surprises.
With the company’s strong brand portfolio, its ability to navigate through a difficult operating environment, upcoming projects and cash deployment strategy, we expect the company to remain well positioned. Las Vegas Sands Corp. presently has a Zacks Rank #2 (Buy).