Macau’s leading gaming operator Sands China has finalized a facility agreement worth approximately $2.49 billion with lenders on Thursday, which includes an 18-month extension of their dividend-restriction period.
According to its voluntary announcement Friday to the Hong Kong Stock Exchange, the dividend-restriction period which previously would have ended July 31st of this year, now is extended to January 1st, 2025.
Sands China needs to follow the restriction on declaring or making dividend payments or similar distributions when its total commitments exceeds $2 billion due to its decision to exercise the “commitments increase option”, and if its consolidated leverage ratio is higher than 4.00 to 1.00.
In January 2021, Sands China exercised its option to expand its unsecured credit facility, increasing lenders’ total commitments by approximately $494 million. The original 2018 agreement included a $2 billion revolving credit facility.
In its 1Q23 financial results, Sands China mentioned the rising “borrowing cost”, saying that “Interest expense, net of amounts capitalized, was $218 million for the 1Q23, compared to $156 million in the prior year quarter. Our weighted average borrowing cost in the 1Q23 was 5.4 percent compared to 4.2 percent during 1Q22, while our weighted average debt balance increased compared to the prior year quarter due to borrowings of $999 million under the SCL Credit Facility in the last year.”