Las Vegas Sands has casino operations in Macau a and in Singapore; having sold off its Las Vegas, Nevada operation for a total of US$6.25 billion in a deal completed in February.

Moody’s observed however that the patchy nature of business recovery – particularly in the Macau market, which is currently in the middle of its largest Covid-19 outbreak since the advent of the pandemic – meant that business performance was “still significantly below 2019 levels”.

As of Wednesday morning, the number of Covid-19 infections in the Macau outbreak – that began on June 19 – stood at 484, an increase of 70 in 24 hours, according to the city’s health authorities.

The Moody’s report authors Adam McLaren and Philip Kibel noted regarding Las Vegas Sands’ outlook: “We expect the ramp up will improve over the back half of 2022, although expect mass-market gaming revenue to still remain roughly 40 percent of 2019 levels by the end of 2022, increasing to 80 percent in 2023.”

They added: “A more full recovery in gross gaming revenue is unlikely until 2024 and is dependent on a resumption of business travel and continued ramp up in leisure travel.”

Las Vegas Sands’ ‘Baa3’ ‘negative’ credit profile was “supported by the high quality, popularity, and favourable reputation of its casino properties, along with the company’s very strong credit metrics leading up to the coronavirus and positive long-term gaming demand trends in each of its geographic markets,” said Moody’s.

Nonetheless, “credit metrics remain very weak for the rating category,” indicated the institution. Moody’s said it expected the casino group’s credit metrics to “remain weak in 2022,” and that restoring credit metrics to levels in line with its expectations “on a run rate basis for 2022 and 2023 could be challenging,” depending on “how much cash is consumed during the period of reduced” visitor flows and “the level of earnings recovery.”

Obligations with a ‘Baa’ rating are subject to “moderate” credit risk, and considered medium-grade, and “may possess speculative characteristics”, according to Moody’s definitions.

Tuesday’s memo outlined that Las Vegas Sands’ credit profile included a fully-available US$1.5-billion revolver facility expiring in 2024; a US$2.5-billion Sands China Ltd facility expiring in July 2023; and a US$551-million Singapore revolver, expiring in February 2026. The latter has US$438 million available, net of bankers’ guarantee, said Moody’s.

The U.S. casino company’s Singapore venue, Marina Bay Sands, also had access to US$2.73-billion via a delayed-draw term loan available through to December 2024, and due to mature in August 2026.

Las Vegas Sands, Sands China, and Marina Bay Sands Pte Ltd “have all financial covenants waived until January 2023,” added Moody’s.