Moody's cuts Las Vegas Sands further into junk
NEW YORK (AP) -- Moody's Investors Service cut credit ratings on casino operator Las Vegas Sands Corp. two notches further into junk territory Wednesday, citing its high debt load and negative trends in Las Vegas, while praising plans to raise capital and trim development spending.
At the corporate level, the agency cut several ratings, including the probability of default, to "B2" from "Ba3."
Some $5 billion in credit facilities issued to the company's Las Vegas subsidiary were cut to "B2" from "Ba3," while $3.3 billion in facilities issued to operations in the Chinese gambling enclave of Macau were cut one notch to "B2" from "B1."
The agency said the ratings are on review for possible further downgrade, especially if a $2.1 billion capital raising program the company announced Monday did not come to fruition. It is set to close Friday.
"Failure to successfully raise adequate new capital, even with the significant reduction in capital spending plans, would likely result in a covenant default and could jeopardize the company's ability to continue as a going concern," analyst Keith Foley said.
If the capital raising program succeeds, it is "expected to alleviate concerns related to liquidity and covenant compliance."
Along with the capital raising plan, the company said Monday it would halt the development of three casinos and two hotel towers in Macau, a condo tower in Las Vegas and the non-casino portions of a complex in Bethlehem, Pa.
Shares in the company fell 41 cents, or 7.7 percent, to $4.93 in Wednesday afternoon trade.
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