www.shaproperty.com

Published September 21, 2007

Sands raising $5b to fund building of S'pore IR

Banks roped in are said to include DBS, UOB, OCBC

(SINGAPORE) Las Vegas Sands Corp, the world's largest casino operator by market value, is seeking a record loan in Singapore currency to fund construction of the nation's first integrated resort (IR), which will include a casino, three people familiar with the deal said.

The gaming firm hired eight banks including the three local banks - DBS, OCBC Bank and United Overseas Bank - as well as Goldman Sachs to arrange the $5 billion borrowing, according to the people, who declined to be identified because the information is private.

The other four arranging banks are Morgan Stanley, Merrill Lynch & Co, Lehman Brothers Holdings Inc and Citigroup Inc.

Ron Reese, spokesman for Las Vegas Sands, didn't reply to an e-mail sent by Bloomberg. Spokesmen at the banks either declined to comment or could not be immediately reached.

Part of the $5 billion will be used to repay a US$1.4 billion 12-month borrowing arranged a year ago, according to the people. The $5 billion loan, maturing in seven to eight years, will be the largest-ever made in Singapore currency, according to data compiled by Bloomberg. It will be backed by the casino.

The interest margin on the loan will be between 2 percentage points and 2.5 percentage points more than the swap offer rate on Singapore currency, according to the people. The three-month rate is fixed at 2.62 per cent yesterday.

That compares with 2.75 percentage points more than the London interbank offered rate Las Vegas Sands is paying on US$3.3 billion borrowed last year for its Macau expansion, a loan that matures in 2011. The three-month Libor rate is 5.59 per cent.

'Banks will likely create a syndicate to spread the risk,' said Lim Kok Boon, chief investment officer here at Fortis Private Banking. 'The collateral in the form of land and building will appreciate.'

Second-quarter profit at Las Vegas Sands, run by billionaire Sheldon Adelson, fell 69 per cent as interest payments on funds borrowed to expand in Asia more than doubled from a year earlier to US$54.4 million.

Las Vegas Sands' downtown Marina Bay resort, neighbouring Singapore's business district, will feature three hotel towers linked by a sky garden, restaurants run by celebrity chefs Charlie Trotter and Thomas Keller, and an art-and-science centre.

The casino company's debt is rated three steps below investment grade at Ba3 by Moody's Investors Service and an equivalent BB- by Standard & Poor's. -- Bloomberg