Marina Bay Sands to Raise SG$8bn in New Expansion Effort

• MBS applies for SG$8bn loan (US$6bn approx.)
• This is the first loan application for the company since 2012
• Singapore approves MBS expansion

Marina Bay Sands (MBS), subsidiary of Las Vegas Sands (LVS), is preparing to apply for a SG$8 billion loan that will be used in the expansion of the existing integrated resort owned by the company in Singapore.

LVS’ Subsidiary Applies for SG$8bn Loan

Las Vegas Sands (LVS) will be in the focus of investors’ interest as Marina Bay Sands (MBS) is returning on the gaming landscape to help the company raise SG$8 billion or approximately US$6 billion. The investment round will require help from several financial institutions.

Las Vegas Sands’ subsidiary will seek to raise SG$4 million of new debt in order to brush up on its existing integrated resort (IR) operation and further extend its operations.

This is the second-largest syndicated loan to take place in Singapore and financial specialists have stated that the company would need to reach out to new borrowers, Reuters reported in a detailed breakdown of the deal. The media cited a Singaporean loan broker who had the following to say, commenting on the deal:

“Marina Bay Sands would have to woo both existing and new lenders to achieve success with this exercise. The borrower has not raised such a size before and it is also unprecedented for the market in Singapore.”

This is the first time MBS is taking a loan sice it closed another deal previously in 2012 and raised SG$5.1 billion. On that occasion, MBS had managed to successfully secure funding from 28 independent lenders.

Since then, the company has been able to extend the loan or add to it on two separate occasions in July 14, 2014 and in March, 2018, with the maturity date now having been set to September 2023 and March 2024.

Even with the improved financial prospects, not many new lenders are expected to join the MSB that haven’t been present in the previous funding rounds.

Marina will be adding a new entertainment area and a hotel tower. As a result, the exclusivity period for the IR will be extended by 2030. Here is what MBS had to say about the additions it plans for its Singaporean IR project:

“With leading design and cutting edge technology, the venue will attract top entertainers from Asia and around the world.”

Will LVS Manage to Pul the Target?

This is the largest investment by far that MBS is undertaking which has made certain observers skeptical of whether the company can channel sufficient financial backing. Here is what a banker close to the matter had to say, as cited by Asgam:

“Marina Bay Sands would have to woo both existing and new lenders to achieve success with this exercise,” one banker was quoted as saying The borrower has not raised such a size before and it is also unprecedented for the market in Singapore.”

Yet, MBS has had a chance to prove its reputation and lenders are happy to oblige once again given the prospects of the brand. The company posted strong EBITDA of US$423 million in Q1, 2019 which amounts to 29% of the total financial performance of the parent company’s EBITDA.

With MBS cleared for a strong expansion bid by Singapore, the SG$8 billion loan move is not at all beyond the means of the company.