LVS development commitments a ‘key credit concern’ despite strong liquidity: Moody’s

U.S-based Las Vegas Sands Corp’s (LVS) “substantial development commitments”, particularly the US$8-billion expansion of its Marina Bay Sands (pictured) casino resort in Singapore, are among “key” concerns regarding the group’s credit profile, says Moody’s Ratings. The institution also cited the possibility that the casino operator could pursue additional integrated resort opportunities, potentially resulting in periods of “elevated leverage” if such projects were financed materially with debt. Moody’s made the comments in a recent credit opinion. The ratings agency currently assigns a ‘Baa3’ senior unsecured rating to Las Vegas Sands, with a ‘stable’ outlook. Its Macau unit Sands China Ltd has a ‘Baa2’ senior unsecured rating, also with a ‘stable’ outlook. “Continued dividends, share repurchases and the use of secured debt to fund developments also constrain the credit profile,” Moody’s stated. The institution nonetheless expects Las Vegas Sands to maintain debt-to-earnings before interest, taxation, depreciation, and amortisation (EBITDA) in the “low 3-times range” and retain “strong liquidity” while undertaking its major developments. Moody’s identified “large capital spending related to development activity” as one of the casino firm’s main credit challenges, alongside the group’s history of significant capital returns to shareholders. Las Vegas Sands spent approximately US$2.02 billion on capital expenditure in 2025, including US$848 million in land premium payments, with a further US$1.49 billion of such payments in 2026, according to the ratings agency. The group has completed the US$750-million second phase of renovations at Marina Bay Sands’ hotel Tower 3, and is now developing the US$8-billion expansion of the Singapore property. Las Vegas Sands maintains a US$5.88-billion delayed-draw term loan facility to fund the project, per the memo. Moody’s said the execution burden associated with the Marina Bay Sands expansion was a credit offset to the Singapore property’s strong operating performance. Marina Bay Sands generated US$2.92 billion in adjusted property EBITDA in 2025, representing a 52.3-percent margin. Second-quarter 2026 EBITDA was US$689 million, on revenue of US$1.38 billion. The ratings agency said it expected Las Vegas Sands’ leverage to remain at about 3.4 times over the next 12 to 18 months, with improvement expected particularly once the Marina Bay Sands expansion is completed. Moody’s forecast Las Vegas Sands revenue of between US$13.8 billion and US$14.2 billion over the next 12 to 18 months, versus US$13.7 billion in the 12 months to June 30. It expects an EBIT margin of between 24 percent and 26 percent. The ratings agency described the group’s liquidity as “strong”. As of June 30, the company had US$3.38 billion of unrestricted cash and cash equivalents, and US$4.26 billion of availability under revolving credit facilities. In Macau, the casino group is continuing a multiyear investment programme, including a refreshment of all 2,900 rooms and suites at The Venetian Macao, with a target date of Chinese New Year 2028 for completion and full relaunch. The group has reiterated a goal of eventually achieving US$700 million or more in quarterly EBITDA from its Macau operations. Sands China reported adjusted property EBITDA of US$430 million for the second quarter this year, down from US$566 million a year earlier, with the result negatively affected by unusually low VIP rolling hold, according to the company’s management. Las Vegas Sands capital expenditure during the second quarter totalled US$332 million, including US$86 million in Macau and US$215 million at Marina Bay Sands.