Fitch Ratings has reaffirmed Las Vegas Sands’ (NYSE: LVS) credit rating at BBB-, the lowest rung of investment grade, with a stable outlook.
In a report issued last Friday, Fitch cited strong free cash flow prospects and the continued performance of Marina Bay Sands in Singapore as primary supports for the rating. The agency also pointed to ongoing softness in Macau, where Sands China operates five casino resorts, as a lingering headwind.
Fitch highlighted the company’s scale, competitive positioning, and solid free cash flow generation, noting these strengths are partially offset by an aggressive capital expenditure program and potential weakness in the Chinese economy.
Sands regained its investment-grade status in early 2024 after ratings were cut to junk shortly after the onset of the COVID-19 pandemic. Fitch upgraded the company in February 2024, supported by an improving EBITDA outlook that is expected to enable further deleveraging.
Focus on Leverage Reduction
Fitch projects Sands’ EBITDA leverage to settle around 3.5x, adding that a sustained move below that level could pave the way for a ratings upgrade.
“LVS’s liquidity is strong, with $4.2 billion in cash and significant availability under its credit facilities,” Fitch noted, while cautioning that prolonged high leverage or weakening liquidity remain key risks.
The ratings agency also emphasized Sands’ long-standing discipline in balance sheet management and its clear communication of leverage targets to investors, factors that reinforce the company’s investment-grade standing and upgrade potential.
While Sands is repurchasing shares—an action Fitch views as justified given valuation—and considering dividend growth, the agency said free cash flow should be sufficient to support both shareholder returns and upcoming debt maturities at Sands China later this year.
Credit Strength on Display
Underscoring its access to capital, Sands recently secured $9 billion in financing for expansion and enhancements at Marina Bay Sands, one of the largest corporate credit facilities ever arranged in Singapore.
Fitch said a potential upgrade would be supported by further leverage reduction and increased geographic diversification. Currently, Sands operates six integrated resorts—five in Macau and Marina Bay Sands in Singapore. Future diversification could hinge on securing a New York-area casino license, potential casino legalization in Texas, or a bid for a Thailand integrated resort.
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