Sands China Redeems $1.8 Billion in Senior Notes Two Years Early

Sands China has completed an exercise that allows it to reduce the weight of its leveraged debt. The Asian arm of casino operator Las Vegas Sands submitted a filing to the Hong Kong Stock Exchange (HKSE) yesterday, explaining that it had redeemed $1.8 billion in senior notes. The move comes on the heels of another exercise that saw the company offer other senior notes, but at a lower interest rate, to investors.

Sands China Cashes In Early

Sands China reportedly redeemed the senior notes on September 24, but filed the move with the HKSE yesterday. The notes carried an interest rate of 4.6% and were to become due in 2023, but new senior unsecured notes the company offered allowed it to shuffle its debt. The filing included a request to withdraw the listing of the notes and Sands China expects that withdrawal to be completed as of October 6.

The exercise was made possible after Sands China released senior unsecured notes to investors with an aggregate principal amount of $1.95 billion, of which $1.93 billion helped cover the redemption. The company also had to add in some of its own cash reserves to cover accrued interest and the make-whole premium tied to the notes, but the new investment options will ultimately save the company money. The buy-and-sell exercise is designed to “further strengthen the liquidity position of the group,” according to a note from Sands China on September 10.

New Notes to Shore Up Operations

The redemption of the senior notes took place just a day after Sands China wrapped up the $1.95 billion offering, which took place in three separate tranches. According to company filings, it distributed $700 million with an annual interest rate of 2.3% in the first tranche, with those notes maturing in March 2027. The second tranche included $650 million in notes with a 2.85% interest rate and a March 2029 maturity. The third involved $600 million, with a 3.25% interest rate and maturity of August 2031.

Previous filings have also shown billion-dollar deals. In June of last year, Sands China issued $1.5 billion in senior unsecured notes to institutional buyers in two tranches. The first covered $800 million and had a 3.8% interest rate and a January 2026 maturity. The remained was issued in the second tranche, offering an interest rate of 4.375% and maturing in June 2030. This past July, the company was approved for a third waiver extension on its $3-billion credit facility with Bank of China Limited.

Las Vegas Sands hasn’t been performing too well in the market lately. At the end of March, it was trading at $59.72 and, as of yesterday afternoon, was down to $37.30 following an almost continuous slide. Sands China has followed a similar path, dropping from HKD$38.60 ($4.96) at the end of March to HKD$15.76 ($2.03) today.