Moody’s sees downgrade risk for LVS

Thursday 19th of March 2020

Moody’s has placed the ratings of Las Vegas Sands on review for a downgrade given the steep drop in gaming revenue at its Macau and Singapore operations as a result of the coronavirus.

The downgrade notice was published on March 16, before the subsequent closure of casinos in Las Vegas.

"The review for downgrade is prompted by steep declines in visitation and gaming revenue in LVSC's Macau and Singapore operations, as a result of the spread of the coronavirus that has restricted travel in the region as well as expected reduced travel, consumer and business activity in the US," stated Adam McLaren, Moody's gaming analyst.

Moody's expects efforts to contain the coronavirus to reduce casino visitation in the US for an unknown period, particularly the Las Vegas strip, because business travel, conferences, and independent leisure travel will decline.

The note said that while Macau casinos have reopened, the ramp up of visitation and gaming revenue will take time as travel restrictions remain in the region.

The operator gets some 64 percent of revenue from Macau and 23 percent from Singapore.

The ratings review will focus on LVS’ ability to preserve its liquidity during this period of significant earnings decline.

Moody’s has a Baa3 senior unsecured rating on LVS and a Baa2 senior unsecured rating on Sands China, which is also under review.