Macau-based casino operator Sands China Ltd. priced $5.5 billion in investment-grade bonds, one of the biggest U.S. dollar deals issued by a gaming company since the financial crisis and the largest sale of U.S. dollar corporate bonds in Asia this year.  The Company’s inaugural deal gave investors a chance to put a decent amount of capital to work in what has been a very slow summer for supply, with accounts placing $19.7 billion in orders.  Year-to-date issuance is still lagging around $94 billion behind the same period last year.

The split-rated benchmark deal (Ba1/BBB-/BBB-) was announced on Aug 2 as U.S. commerce secretary Wilbur Ross doubled down on the tariff sentiment and President Donald Trump proposed a higher 25% tariff on $200 billion worth of Chinese imports.  Yet, despite the trade talks and market volatility, the 3-tranche offering saw pricing tighten from initial whispers.  The deal comprised a $1.8 billion 5-year tranche at T+175 bps, down from initial price thoughts of 200 bps area, a $1.8 billion 7-year tranche at T+220 bps, down from 235 bps area and a $1.9 billion 10-year tranche at T+245 bps, down from 260 bps area.  Sands China, which is majority-owned by Las Vegas Sands Corp, intends to use the proceeds to repay in full its outstanding term loans.

Further testament to the strength of the markets and signs of pent-up investor demand was apparent in the bond sales by Hong Kong-based shipping conglomerate China Merchants Port Holdings Co., China Mengniu Dairy Co. and Korea’s Woori Bank, all of which also met with robust demand.

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