BASIS POINT-Venetian sends out term sheets for US$2.25 bln loan -sources

Fri Jun 7, 2013 4:18am EDT

HONG KONG, June 7 (BASIS POINT) - Venetian Macau Ltd has sent out term sheets to relationship banks for an up to US$2.25 billion six-year financing, sources said.

The gaming giant was earlier reported to be talking to banks on a potential refinancing of its US$3.7 billion loan from September 2011. Sources said the new deal is for refinancing and a new development plot in Macau.

The financing is split into an up to US$1.5 billion revolving credit and an up to US$750 million term loan.

The facility can be funded in HK$, MOP or US$. The average life is around five years.

The margin is based on a consolidated leverage ratio grid, opening at 150 bp over Libor. The margin is 125 bp over Libor for leverage ratio of one time or less, 150 bp for 1-2 times, 175 bp for 2-2.5 times, or 200bp for over 2.5 times.

Banks are now being invited to join at a top level and asked to commit by June 14. Bank meetings could be held in Macau and/or Taipei in early July with general syndication scheduled after, and closing targeted for August.

The Venetian Macau name has been actively sought in the secondary market. In December, the gaming paper was on offer at 96-98% of par.

The existing US$3.7bn financing due November 2016 is denominated in HK$, MOP and US$ and comprises a US$3.2 billion amortising term loan and a US$500 million revolving credit.

Coordinating arrangers on the deal were Bank of China Macau, Bank of America Merrill Lynch, Commerzbank, Goldman Sachs, Industrial & Commercial Bank of China Macau, Sumitomo Mitsui Banking Corp, BNP Paribas, Barclays Capital, Citigroup, Credit Agricole CIB, Credit Suisse, ING Bank, UBS and UOB.

In primary, both tranches paid a top-level all-in of 254 bp via an initial margin of 225 bp over Hibor or Libor. Average life was at 4.5 years after a three-year grace period.

The margin, based on a leverage grid, is now at 150 bp over Libor. The financing is borrowed via Venetian Macau US Finance Co LLC. Sands China Ltd's units Venetian Macau Ltd and Venetian Orient Ltd provided guarantees.

Sands China reported a 38% increase in total net revenues for the first quarter of 2013 to US$2bn, from US$1.45bn a year earlier. Meanwhile, adjusted EBITDA increased 39% to US$626m for the same period, compared to US$450.5m the previous year. Net income increased 62% to US$453.4m, compared to US$279.3m.

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