Las Vegas Sands’ Improving Credit Metrics (LVS)

S&P raised Las Vegas Sands’ corporate credit rating to ‘BB-‘ from ‘B’ and the new rating outlook is STABLE. The thesis for the report is that Las Vegas Sands should outperform S&P’s prior EBITDA targets for 2010 and should outperform for the next few years.  The new Marina Bay Sands property in Singapore was the key driving force behind the call.  S&P expects that EBITDA will be more than $600 million in 2010 and that it may hit $1.1 billion in 2011.

The area of caution is a reminder about having too much leverage.  S&P noted that the company’s debt burden is above $10 billion and its cap-ex plans are roughly $4.3 billion in 2010 and 2011.

The move to ‘BB-‘ is still short of the BBB- needed to secure an investment grade rating.  For now, S&P noted that further raises in the rating are limited due to a lack of clarity over the company’s future development projects.

JON C. OGG