Fitch Ratings still maintains an investment-grade credit rating for Las Vegas Sands (NYSE: LVS). However, the research firm still reserves some negative outlook on that grade.
Fitch Ratings notes that LVS will take time for its gaming market to rebound. The research firm further notes that the negative outlook of the casino giant is due to the revised projections for its Macau and Singapore integrated resorts.
Fitch projects that Macau’s gaming revenue won’t fully recover to the 2019 levels until 2024. The rating firm further project that the Singapore gaming recovery will be faster due to high vaccination rates and strong domestic demand.
Due to the recent uptick in coronavirus cases in Mainland China, Macau’s recovery is starting to flirt. LVS operates five gaming venues in the world’s largest casino hub and obtains three-quarters of its revenue from that market.
However, the LVS credit grade stands out despite the negative outlook it is getting. Fitch claims neither of its Macau casinos is in danger of downgrade for the casino company has put efforts to reduce debt in the past 18 months.
Furthermore, Sands China on Thursday announced that it is selling dollar-dominated senior unsecured notes to pay off $1.8 billion debt coin to maturity in 2023.
Fitch projects LVS to achieve 3.5 times net leverage metrics by 2022 and attain 4.0 times gross leverage by 2023. Sands can attain solid net leverage given that the company has halted shareholders’ dividends.