01—Abstract
Summary
Summary of the 8-K filed April 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Las Vegas Sands Corp. (LVS) reported on its Form 8-K filed April 3, 2024 that it entered into a new Revolving Credit Agreement dated April 3, 2024 (the Closing Date) with lenders and issuing banks party thereto and The Bank of Nova Scotia as administrative agent, swingline lender and an issuing bank.
The new facility provides for aggregate principal of $1.5 billiona, including a $150 million sub-facility for letters of credit, for working capital, general corporate purposes and other purposes not prohibited by the agreement. Outstanding loans are scheduled to mature, and unused commitments to terminate, on April 3, 2029. On the Closing Date, the company terminated and repaid all outstanding obligations under its existing Revolving Credit Agreement dated August 9, 2019, as amended, with Scotiabank as administrative agent.
The filing states that the new facility was entered into in connection with that refinancing, which is the Item 1.02 termination disclosed alongside the Item 2.03 creation of a direct financial obligation. For investors, the key terms are pricing and covenants. Loans bear interest at either SOFR plus an applicable margin of 1.125%b to 1.550% per annum, or an alternate base rate plus 0.125% to 0.550% per annum, depending on the borrower's corporate family credit rating.
The undrawn commitment fee ranges from 0.125%c to 0.250% per annum. The financial covenant caps the Borrower and its Restricted Subsidiaries at a maximum consolidated net leverage ratio of 4.00 to 1.00, tested at each fiscal quarter end, alongside customary negative covenants on liens, subsidiary indebtedness, mergers and certain investments. Customary events of default apply, and a majority of lenders may terminate unused commitments and accelerate amounts outstanding upon a continuing default.
02—Key points
Key Highlights
- New $1.5 billion revolving credit facility dated April 3, 2024, including a $150 million letter of credit sub-facility
- Facility matures and unused commitments terminate on April 3, 2029
- Existing revolving credit agreement dated August 9, 2019 was terminated and all outstanding obligations were repaid on the Closing Date
- Loans priced at SOFR plus 1.125% to 1.550% per annum, or alternate base rate plus 0.125% to 0.550% per annum, based on the corporate family credit rating
- Undrawn commitment fee of 0.125% to 0.250% per annum, paid quarterly in arrears
- Financial covenant requires a maximum consolidated net leverage ratio of 4.00 to 1.00, tested at each fiscal quarter end
- Credit agreement is administered by The Bank of Nova Scotia as administrative agent, swingline lender and an issuing bank
03—Questions
Frequently Asked Questions
How large is the new revolving credit facility and what can the proceeds be used for?
The Revolving Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $1.5 billion, which includes a $150 million sub-facility for letters of credit. Proceeds of loans and letters of credit may be used for working capital and general corporate purposes of the Borrower and its affiliates, and for any other purpose not prohibited by the agreement.
When does the new credit facility mature?
Outstanding loans under the Revolving Credit Agreement are scheduled to mature, and unused commitments are scheduled to terminate, on April 3, 2029.
What interest rates and fees apply to the facility?
Loans bear interest at either SOFR as administered by the Federal Reserve Bank of New York plus an applicable margin of 1.125% to 1.550% per annum, or an alternate base rate plus an applicable margin of 0.125% to 0.550% per annum, depending on the Borrower's corporate family credit rating at the Borrower's option. A quarterly commitment fee of 0.125% to 0.250% per annum applies to the undrawn portion of the revolving commitments, also depending on the corporate family credit rating.
What financial and operating restrictions does the agreement impose?
The agreement requires the Borrower and its Restricted Subsidiaries to maintain a maximum consolidated net leverage ratio of 4.00 to 1.00 as of the last day of each fiscal quarter. Negative covenants limit liens on assets of the Borrower and certain subsidiaries, indebtedness incurred by Restricted Subsidiaries, mergers, consolidations or liquidations (or sales of substantially all assets), and investments in subsidiaries that are not Restricted Subsidiaries. Customary exceptions and thresholds apply.
What happens if the Borrower defaults under the agreement?
The agreement contains customary events of default, including payment defaults, cross defaults to material debt, bankruptcy and insolvency, and covenant or representation breaches, subject to customary grace periods. Upon a continuing event of default, the majority of lenders may terminate unused commitments and accelerate amounts outstanding under the agreement.
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