Sands China seeks US$ 3 billion refinancing

This comes shortly after Melco Crown Entertainment, a Macau casino operator headed by tycoons Lawrence Ho and James Packer, rolled out its US$1.2 billion financing deal on Tuesday.  

Sands China's deal is to refinance and upsize its maturing US$ 2.5 billion project financing secured in May 2006 for the flagship Venetian Macau casino resort on the Cotai Strip. The borrower was in talks with relationship banks for the structure and pricing details of the new facility, expected to hit the market for general syndication by late May, banking sources said.  

Three loans bankers who are looking at Sands China's new deal expect the facility to be priced at least 100 basis points lower than the US$ 1.75 billion-equivalent five-year loan the borrower completed in May 2010, largely because of the improving gaming sector outlook.    

The deal, which was to allow Sands China to finish construction on Lots 5 and 6 of the Venetian Macau development that was mothballed during the global financial crisis in late 2008, paid a top-level all-in of 499bp via a margin of 450bp over Libor or Hibor.

Bank of China Macau, BNP Paribas, Citigroup Inc , Barclays Capital , Goldman Sachs Group Inc , UBS AG , Industrial & Commercial Bank of China Macau, Banco Nacional Ultramarino, DBS Bank and Overseas Chinese Banking Corp were mandated lead arrangers. It took the MLA group almost nearly five months to close the syndication and with only six lenders joined in the end.   

"Times have changed. The gaming sector's strong growth is likely to draw the attention of lenders, especially when margins for Hong Kong's blue-chip borrowers are still slim," said a corporate loan banker with a Chinese bank in Hong Kong.  

Bolstered by an influx of tourists from mainland China, casino revenue in Macau, the world's biggest gaming market, rose 48 % year on year in March to US$ 2.51 billion, according to official data from the Macau government released earlier this month.  

Sands China's outstanding US$ 2.5 billion deal, borrowed via Venetian Macau US Finance Co and guaranteed by Sands China units Venetian Macau and Venetian Cotai, comprised a US$ 500 million five-year revolving credit, a US$ 700 million six-year delayed-draw term loan, a US$ 1.2 billion seven-year funded term loan and a US$ 100 million-equivalent in patacas five-year term loan. Venetian paid an initial margin of 275bp over Libor across all tranches and the margin steps down based on a leverage ratio matrix upon completion of the Venetian Macau.