{"id":316316,"date":"2024-04-03T16:32:36","date_gmt":"2024-04-03T21:32:36","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=316316"},"modified":"2024-04-04T10:03:28","modified_gmt":"2024-04-04T15:03:28","slug":"sands-credit-rating-could-be-hindered-by-shareholder-rewards","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/","title":{"rendered":"Las Vegas Sands Credit Rating Could Be Hindered by Shareholder Rewards"},"content":{"rendered":"

Las Vegas Sands\u2019 (NYSE: LVS) shareholder rewards efforts, including buybacks and dividends, could be headwinds to a credit ratings upgrade, according to Moody\u2019s Investors Service.<\/p>\n

\"Marina
Singapore\u2019s iconic Marina Bay Sands. Operator Las Vegas Sands could experience credit rating constraints due to shareholder rewards, says Moody’s. (Image: STB<\/em>)<\/figcaption><\/figure>\n

In reiterating a \u201cBaa3\u201d rating with a \u201cstable\u201d outlook on the casino operator, Moody\u2019s said it expects Sands to continue paying dividends and repurchasing its shares — moves that could act as \u201ccredit constraints.\u201d The Baa3 grade is three notches into junk territory on the Moody\u2019s ratings scale. After suspending its quarterly payout in the early days of the coronavirus pandemic, LVS restarted dividends last July<\/a>, paying out $150 million to investors in the third and fourth quarters.<\/p>\n

The stable outlook reflects our expectation that visitation and gaming revenues will continue to ramp up in 2024, enabling Las Vegas Sands to restore credit metrics to levels in line with our expectations for the Baa2 Sand China Ltd \/ Baa3 Las Vegas Sands senior unsecured ratings, including leverage in the low 3x range,\u201d observed Moody\u2019s.<\/p><\/blockquote>\n

Currently, Sands China doesn\u2019t pay a dividend<\/a>, making it one of three Macau operators not doing so, but analysts believe the company will be the next to rejoin the Macau dividend group. LVS also announced a $2 billion share repurchase program last October.<\/p>\n

Expansion Could Also Hinder Sands Credit Rating<\/h2>\n

Moody\u2019s noted Sands is likely to continue preserving ample liquidity, manage upcoming debt maturities, and possibly pare overall debt. However, leverage could increase should the operator prove successful in pursuit of various new projects.<\/p>\n

\n

Those include a New York City-area casino permit,<\/a> a Texas integrated resort, and the possibility of bidding on a Thailand casino should that country formally approve regulated gaming. Of those three, New York is the most likely over the medium term, but even in that case, it could be late 2025 before bidders there know their fates.<\/p>\n<\/div>\n

Moody\u2019s expressed concern that as LVS pursues \u201cfurther and significant global casino resort development opportunities that will likely be funded largely with debt that could lead to temporary leveraging.\u201d<\/p>\n

Sands\u2019 credit rating and outlook are supported by the \u201chigh quality, popularity, and favorable reputation\u201d of the operator\u2019s venues.<\/p>\n

Sands Still Has Strong Cash Position<\/h2>\n

Sands isn\u2019t funding shareholder rewards with newly issued debt, a positive in a high interest-rate environment. The company had $5.11 billion in unrestricted cash balances at the end of last year, indicating it has the resources to support buybacks and dividends<\/a>.<\/p>\n

\n

Additionally, restarting the dividend was meaningful because prior to the suspension, Sands had one of the best reputations for payout growth in the broader consumer discretionary cyclical. Likewise, a downgrade of its credit rating doesn\u2019t appear likely over the near term.<\/p>\n<\/div>\n

Moody\u2019s added that LVS could see its credit rating downgraded if the operator\u2019s liquidity is pinched or if the gaming company\u2019s earnings recovery takes longer than expected. A surprising reversal of recent fortune in Macau or a broader reduction in consumer cyclical are other factors that could trigger a downgrade.<\/p>\n","protected":false},"excerpt":{"rendered":"

Las Vegas Sands\u2019 (NYSE: LVS) shareholder rewards efforts, including buybacks and dividends, could be headwinds to a credit ratings upgrade, according to Moody\u2019s Investors Service. In reiterating a \u201cBaa3\u201d rating with a \u201cstable\u201d outlook on the casino operator, Moody\u2019s said it expects Sands to continue paying dividends and repurchasing its shares — moves that could […]<\/p>\n","protected":false},"author":46,"featured_media":292580,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,10],"tags":[81913,81903],"acf":[],"yoast_head":"\nSands Credit Rating Could Be Hindered by Shareholder Rewards<\/title>\n<meta name=\"description\" content=\"Las Vegas Sands Credit Rating Could Be Hindered by Shareholder Rewards.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sands Credit Rating Could Be Hindered by Shareholder Rewards\" \/>\n<meta property=\"og:description\" content=\"Las Vegas Sands Credit Rating Could Be Hindered by Shareholder Rewards.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-03T21:32:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-04T15:03:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/MBS.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/\",\"url\":\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/\",\"name\":\"Sands Credit Rating Could Be Hindered by Shareholder Rewards\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/MBS.jpg\",\"datePublished\":\"2024-04-03T21:32:36+00:00\",\"dateModified\":\"2024-04-04T15:03:28+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Las Vegas Sands Credit Rating Could Be Hindered by Shareholder Rewards.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/sands-credit-rating-could-be-hindered-by-shareholder-rewards\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/MBS.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/MBS.jpg\",\"width\":1200,\"height\":675,\"caption\":\"Singapore\u2019s iconic Marina Bay Sands. 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