September 2, 2009 / 1:41 PM / 10 years ago

UPDATE 3-Las Vegas Sands to sell $600 mln in bonds

* Issuance expected on Friday

* Sale part of efforts to boost financial strength

* Shares up 4.5 percent (Adds analyst comment, updates share price)

NEW YORK, Sept 2 (Reuters) - Las Vegas Sands Corp (LVS.N), one of the world’s largest casino companies, has secured commitments to raise up to $600 million through the sale of exchangeable bonds, the company said on Wednesday.

The bonds will have to be swapped for common shares of the company’s Macau unit after the unit’s pending initial public offering on the Hong Kong Stock Exchange.

The sale is part of highly leveraged Las Vegas Sands’ efforts to boost its financial strength, the company said. It recently amended its $3.3 billion Macau credit facility and plans to take one of its subsidiaries public.

The financing would “enhance our current liquidity position and further our efforts toward reaching long-term financial stability,” Chief Executive Sheldon Adelson said in a statement.

Sands said proceeds from the bonds, which are expected to be issued on Friday, will be used for general purposes “including to repay certain amounts funded by the company and its domestic subsidiaries.” A spokesman for Sands declined to comment on whether the money would be moved back to the United States or used to repay Macau indebtedness.

The company’s shares rose 61 cents, or 4.5 percent, to $14.06 on the New York Stock Exchange early Wednesday afternoon.

The financing will prevent looming U.S. debt covenant breaks in the third and fourth quarter, Bernstein Research analyst Janet Brashear said in a research note.

“Without this stop-gap measure, we had projected that LVS would have approximately $100 million too much debt at September 30 and approximately $400 million too much debt at December 31,” she wrote.

Brashear, who has an “outperform” rating on the stock, also said the financing indicates confidence in a strong IPO, assuming the financing is fully subscribed.

“Completion of the Hong Kong IPO is the last hurdle, but today’s development is material as it probably further reduces near-term covenant risk,” Bank of America analyst Shaun Kelley said in a research note. (Reporting by Deepa Seetharaman and Deena Beasley; Editing by John Wallace and Richard Chang)

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