Long-Term Debt
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Dec. 31, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in thousands):
Corporate and U.S. Related Debt Senior Secured Credit Facility In May 2007, the Company entered into a $5.0 billion senior secured credit facility (the “Senior Secured Credit Facility”), which originally consisted of a $3.0 billion funded term B loan (the “Term B Facility”), a $600.0 million delayed draw term B loan available for 12 months after closing (the “Delayed Draw I Facility”), a $400.0 million delayed draw term B loan available for 18 months after closing (the “Delayed Draw II Facility”) and a $1.0 billion revolving credit facility, of which up to $100.0 million was available on a swingline basis (the “Revolving Facility”). In August 2010, the Senior Secured Credit Facility was amended to, among other things, modify certain financial covenants, including increasing the maximum leverage ratio for the quarterly periods through June 30, 2012. In addition to the amendment, certain lenders elected to extend the maturity of $1.42 billion in aggregate principal amount of the Term B Facility to November 2016 (the “Extended Term B Facility”), $284.5 million in aggregate principal amount of the Delayed Draw I Facility to November 2016 (the “Extended Delayed Draw I Facility”), $207.9 million in aggregate principal amount of the Delayed Draw II Facility to November 2015 (the “Extended Delayed Draw II Facility,” collectively the “Extended Term Loans”) and to extend the availability of $532.5 million (after giving effect to the reductions described below) of the Revolving Facility to May 2014 (the “Extended Revolving Facility”). As part of the extension, the Company was required to pay down $1.0 billion in aggregate principal amount of the Extended Term Loans and the commitments under the Revolving Facility were reduced from $1.0 billion to $750.0 million. In addition to the pay down of $1.0 billion of the Extended Term Loans described above, the Company paid down $775.9 million under the Revolving Facility during the year ended December 31, 2010. The Company terminated the Revolving Facility in December 2011 and recorded a $0.5 million loss on early retirement as a result. The Company paid down $400.0 million under the Senior Secured Credit Facility during the year ended December 31, 2012, and recorded a $1.6 million loss on early retirement of debt as a result. Borrowings under the Senior Secured Credit Facility, as amended, bore interest, at the Company’s option, at either an adjusted Eurodollar rate or at an alternative base rate plus a credit spread. For base rate borrowings, the initial credit spread was 0.5% per annum and 0.75% per annum for the Revolving Facility and the term loans, respectively, and 1.25% per annum and 1.75% per annum for the Extended Revolving Facility and the Extended Term Loans, respectively. For Eurodollar rate borrowings, the initial credit spread was 1.5% per annum and 1.75% per annum for the Revolving Facility and the term loans, respectively, and 2.25% per annum and 2.75% per annum for the Extended Revolving Facility and Extended Term Loans, respectively. These spreads would be reduced if the Company’s “corporate rating” (as defined in the Senior Secured Credit Facility) increased to at least Ba2 by Moody’s and at least BB by Standard & Poor’s Ratings Group (“S&P”), subject to certain additional conditions. The spread for the Extended Revolving Facility would be further reduced if the Company’s “corporate rating” increased to at least Ba1 or higher by Moody’s and at least BB+ or higher by S&P, subject to certain additional conditions. The weighted average interest rate for the Senior Secured Credit Facility was 2.3% and 2.5% for the years ended December 31, 2013 and 2012, respectively. The Company paid a commitment fee of 0.375% per annum on the undrawn amounts under the Extended Revolving Facility, as well as a commitment fee equal to 0.75% per annum and 0.5% per annum on the undrawn amounts under the Delayed Draw I and II Facilities, respectively. In December 2013, borrowings under the new 2013 U.S. Credit Facility (as further described below) were used to repay the outstanding balance on the Senior Secured Credit Facility. The Company recorded a $14.2 million loss on modification or early retirement of debt during the year ended December 31, 2013. 2013 U.S. Credit Facility In December 2013, the Company entered into a $3.5 billion senior secured credit facility (the “2013 U.S. Credit Facility”), which consists of a $2.25 billion funded term B loan (the “2013 U.S. Term B Facility”) with an original issue discount of $11.3 million and a $1.25 billion revolving credit facility (the “2013 U.S. Revolving Facility”). As of December 31, 2013, the Company had $655.5 million of available borrowing capacity under the 2013 U.S. Revolving Facility, net of outstanding letters of credit. Subsequent to year end, the Company borrowed $500.0 million under the 2013 U.S. Revolving Facility. The 2013 U.S. Term B Facility matures on December 19, 2020, and is subject to quarterly amortization payments of $5.6 million, which begin on March 31, 2014, followed by a balloon payment of $2.10 billion due on December 19, 2020. The 2013 U.S. Revolving Facility has no interim amortization payments and matures on December 19, 2018. The 2013 U.S. Credit Facility is guaranteed by certain of the Company’s domestic subsidiaries (the “Guarantors”). The obligations under the 2013 U.S. Credit Facility and the guarantees of the Guarantors are collateralized by a first-priority security interest in substantially all of Las Vegas Sands, LLC (“LVSLLC”) and the Guarantors’ assets, other than capital stock and similar ownership interests, certain furniture, fixtures and equipment, and certain other excluded assets. Borrowings under the 2013 U.S. Credit Facility bear interest, at the Company’s option, at either an adjusted Eurodollar rate or at an alternative base rate plus a credit spread. For base rate borrowings, the initial credit spread is 0.5% per annum and 1.5% per annum for the 2013 U.S. Revolving Facility and the 2013 U.S. Term B Facility, respectively. For Eurodollar rate borrowings, the initial credit spread is 1.5% per annum and 2.5% per annum for the 2013 U.S. Revolving Facility and the 2013 U.S. Term B Facility (subject to a Eurodollar rate floor of 0.75%), respectively (the interest rates were set at 3.3% and 1.7% for the 2013 U.S. Term B Facility and 2013 U.S. Revolving Facility, respectively, as of December 31, 2013). The weighted average interest rate for the 2013 U.S Credit Facility was 2.9% during the period ended December 31, 2013. The Company pays a commitment fee of 0.35% per annum on the undrawn amounts under the 2013 U.S. Revolving Facility, which will be reduced if certain corporate ratings are achieved, subject to certain additional conditions. The 2013 U.S. Credit Facility contains affirmative and negative covenants customary for such financings, including, but not limited to, limitations on incurring additional liens, incurring additional indebtedness, making certain investments and acquiring and selling assets. The 2013 U.S. Credit Facility also requires the Guarantors to comply with financial covenants, including, but not limited to, a maximum ratio of net debt outstanding to adjusted earnings before interest, income taxes, depreciation and amortization, as defined (“Adjusted EBITDA”) to the extent there is an outstanding balance on the 2013 U.S. Revolving Facility or certain letters of credit are outstanding. The maximum leverage ratio is 5.5x for all applicable quarterly periods through maturity. The 2013 U.S. Credit Facility also contains conditions and events of default customary for such financings. As of December 31, 2013, approximately $4.96 billion of net assets of LVSLLC were restricted from being distributed under the terms of the 2013 U.S. Credit Facility. Senior Notes On February 10, 2005, LVSC sold in a private placement transaction $250.0 million in aggregate principal amount of its 6.375% senior notes due 2015 with an original issue discount of $2.3 million. In June 2005, the senior notes were exchanged for substantially similar senior notes (the “Senior Notes”), which were registered under the federal securities laws. The Senior Notes were set to mature on February 15, 2015. In March 2012, the Company redeemed the remaining balance of Senior Notes outstanding for $191.7 million and recorded a $2.8 million loss on early retirement of debt during the year ended December 31, 2012. Airplane Financings In February 2007, the Company entered into promissory notes totaling $72.0 million to finance the purchase of one airplane and to finance two others that the Company already owned. The notes consist of balloon payment promissory notes and amortizing promissory notes, all of which have ten-year maturities and are collateralized by the related aircraft. The notes bear interest at three-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.5% per annum (set at 1.8% as of December 31, 2013). The amortizing notes, totaling $28.8 million, are subject to quarterly amortization payments of $0.7 million, which began June 1, 2007. The balloon notes, totaling $43.2 million, mature on March 1, 2017, and have no interim amortization payments. The weighted average interest rate on the notes was 1.8% and 2.0% during the years ended December 31, 2013 and 2012, respectively. In April 2007, the Company entered into promissory notes totaling $20.3 million to finance the purchase of an additional airplane. The notes have ten-year maturities and consist of a balloon payment promissory note and an amortizing promissory note. The notes bear interest at three-month LIBOR plus 1.25% per annum (set at 1.6% as of December 31, 2013). The $8.1 million amortizing note is subject to quarterly amortization payments of $0.2 million, which began June 30, 2007. The $12.2 million balloon note matures on March 31, 2017, and has no interim amortization payments. The weighted average interest rate on the notes was 1.6% and 1.7% during the years ended December 31, 2013 and 2012, respectively. HVAC Equipment Lease In July 2009, the Company entered into a capital lease agreement with its current heating, ventilation and air conditioning (“HVAC”) provider (the “HVAC Equipment Lease”) to provide the operation and maintenance services for the HVAC equipment in Las Vegas. The lease has a 10-year term with a purchase option at the third, fifth, seventh and tenth anniversary dates. The Company is obligated under the agreement to make monthly payments of approximately $300,000 for the first year with automatic decreases of approximately $14,000 per month on every anniversary date. The HVAC Equipment Lease was capitalized at the present value of the future minimum lease payments at lease inception. Macao Related Debt 2011 VML Credit Facility On September 22, 2011, two subsidiaries of the Company, VML US Finance LLC, the Borrower, and Venetian Macau Limited ("VML"), as guarantor, entered into a credit agreement (the “2011 VML Credit Facility”), providing for up to $3.7 billion (or equivalent in Hong Kong dollars or Macao patacas), which consists of a $3.2 billion term loan (the “2011 VML Term Facility”) that was fully drawn on November 15, 2011, and a $500.0 million revolving facility (the “2011 VML Revolving Facility”), none of which was drawn as of December 31, 2013, that is available until October 15, 2016. Borrowings under the facility were used to repay outstanding indebtedness under previous credit facilities (the "VML Credit Facility" and the "VOL Credit Facility") and will be used for working capital requirements and general corporate purposes, including for the development, construction and completion of certain components of Sands Cotai Central. The Company recorded a charge of $22.1 million for loss on modification or early retirement of debt during the year ended December 31, 2011, as part of refinancing the VML and VOL Credit Facilities. The indebtedness under the 2011 VML Credit Facility is guaranteed by VML, Venetian Cotai Limited, Venetian Orient Limited and certain of the Company’s other foreign subsidiaries (collectively, the “2011 VML Guarantors”). The obligations under the 2011 VML Credit Facility are collateralized by a first-priority security interest in substantially all of the Borrower’s and the 2011 VML Guarantors’ assets, other than (1) capital stock and similar ownership interests, (2) certain furniture, fixtures, fittings and equipment and (3) certain other excluded assets. The 2011 VML Term Facility will mature on November 15, 2016. Commencing with the quarterly period ending December 31, 2014, and at the end of each subsequent quarter through September 30, 2015, the Borrower is required to repay the outstanding 2011 VML Term Facility on a pro rata basis in an amount equal to 6.25% of the aggregate principal amount outstanding as of November 15, 2011. Commencing with the quarterly period ending on December 31, 2015, and at the end of each subsequent quarter through June 30, 2016, the Borrower is required to repay the outstanding 2011 VML Term Facility on a pro rata basis in an amount equal to 10.0% of the aggregate principal amount outstanding as of November 15, 2011. The remaining balance on the 2011 VML Term Facility and any balance on the 2011 VML Revolving Facility are due on the maturity date. In addition, the Borrower is required to further repay the outstanding 2011 VML Term Facility with a portion of its excess free cash flow (as defined by the 2011 VML Credit Facility) after the end of each year, unless the Borrower is in compliance with a specified consolidated leverage ratio (the “CLR”). Borrowings under the 2011 VML Credit Facility bear interest at either the adjusted Eurodollar rate or an alternative base rate (in the case of U.S. dollar denominated loans) or Hong Kong Inter-bank Offered Rate ("HIBOR," in the case of Hong Kong dollar and Macao pataca denominated loans), as applicable, plus an initial spread of 2.25%. Beginning May 14, 2012, the spread for all outstanding loans is subject to reduction based on the CLR (interest rates set at 1.7% for the U.S. dollar, Hong Kong dollar and Macao pataca denominated loans as of December 31, 2013). The Borrower will also pay standby fees of 0.5% per annum on the undrawn amounts under the 2011 VML Revolving Facility (which commenced September 30, 2011) and the 2011 VML Term Facility (which commenced October 31, 2011). The weighted average interest rate on the 2011 VML Credit Facility was 1.8% and 2.1% for the years ended December 31, 2013 and 2012, respectively. To meet the requirements of the 2011 VML Credit Facility, the Company entered into four interest rate cap agreements in September 2012 with a combined notional amount of $1.3 billion, which expire in November 2014. During 2013, the Company entered into two additional interest rate cap agreements with a combined notional amount of $300.0 million, which expire in November 2014. The provisions of the interest rate cap agreement entitle the Company to receive from the counterparty the amounts, if any, by which the selected market interest rate exceeds the strike rate (which range from 2.0% to 2.25%). These interest rate cap agreements were in addition to the following interest rate cap agreements for the VML and VOL Credit Facilities. To meet the requirements of the previous VML Credit Facility, the Company entered into an interest rate cap agreement in September 2009 with a notional amount of $1.59 billion, which expired in September 2012. The provisions of the interest rate cap agreement entitled the Company to receive from the counterparty the amounts, if any, by which the selected market interest rate exceeded the strike rate of 9.5%. To meet the requirements of the previous VOL Credit Facility, the Company entered into three interest rate cap agreements in September 2010 with a combined notional amount of $375.0 million, which expired in September 2013. The provisions of the interest rate cap agreement entitled the Company to receive from the counterparty the amounts, if any, by which the selected market interest rate exceeded the strike rate of 3.5%. There was no net effect on interest expense as a result of these interest rate cap agreements for the years ended December 31, 2013, 2012 and 2011. The 2011 VML Credit Facility contains affirmative and negative covenants customary for such financings, including, but not limited to, limitations on liens, loans and guarantees, investments, acquisitions and asset sales, restricted payments and other distributions, affiliate transactions, certain capital expenditures and use of proceeds from the facility. The 2011 VML Credit Facility also requires the Borrower and VML to comply with financial covenants, including maximum ratios of total indebtedness to Adjusted EBITDA and minimum ratios of Adjusted EBITDA to net interest expense. The maximum leverage ratio is 4.0x for the quarterly periods ending December 31, 2013 through December 31, 2014, decreases to 3.5x for the quarterly periods ending March 31 through December 31, 2015, and then decreases to, and remains at, 3.0x for all quarterly periods thereafter through maturity. The 2011 VML Credit Facility also contains events of default customary for such financings. The Company is currently in the process of amending and restating its 2011 VML Credit Facility. The amendment will allow each lender holding term loans under the 2011 VML Credit Facility to extend the maturity of its term loans to 2020 and will provide for new revolving loan commitments of $2.0 billion. The Company will also have the option to raise incremental senior secured and unsecured debt under existing baskets within the amended credit facility. Proceeds from the amended credit facility, together with cash on hand, may be used to repay outstanding term loans that are not extended under the amended credit facility and fund ongoing development projects pursuant to the terms of the amended credit facility and general corporate operations. The amendment, which is subject to approval of the lenders and certain Macao government approvals, is anticipated to close during the first quarter of 2014. In conjunction with the amendment, the Company anticipates recording a loss on modification or extinguishment of debt. Ferry Financing In January 2008, in order to finance the purchase of ten ferries, the Company entered into a 1.21 billion Hong Kong dollar (“HKD,” approximately $155.9 million at exchange rates in effect on December 31, 2013) secured credit facility (the "Ferry Financing"), which was available for borrowing for up to 18 months after closing. The proceeds from the secured credit facility were used to reimburse the Company for cash spent to date on the progress payments made on the ferries and to finance the completion of the remaining ferries. The facility was collateralized by the ferries and guaranteed by VML. In July 2008, the Company exercised the accordion option on the secured credit facility agreement that financed the Company’s original ten ferries and executed a supplement to the secured credit facility agreement. The supplement increased the secured credit facility by an additional HKD 561.6 million (approximately $72.4 million at exchange rates in effect on December 31, 2013). The proceeds from this supplemental facility were used to reimburse the Company for cash spent to date on the progress payments made on four additional ferries and to finance the remaining progress payments on those ferries. The supplemental facility was collateralized by the additional ferries and guaranteed by VML. The facility, as amended on August 20, 2009, was set to mature in December 2015 and was subject to 26 quarterly payments of HKD 68.1 million (approximately $8.8 million at exchange rates in effect on December 31, 2013), which commenced in October 2009. As part of the amendment, the credit spread increased by 50 basis points to 2.5% per annum for borrowings made in Hong Kong Dollars and accrued interest at HIBOR, or 2.5% per annum for borrowings made in U.S. Dollars and accrued interest at LIBOR. The weighted average interest rate for the facility was 2.9% for the year ended December 31, 2012. The Company repaid the $131.6 million outstanding balance under the Ferry Financing and recorded a $1.7 million loss on early retirement of debt during the year ended December 31, 2012. Singapore Related Debt 2012 Singapore Credit Facility In June 2012, the Company’s wholly owned subsidiary, Marina Bay Sands Pte. Ltd. (“MBS”), entered into a SGD 5.1 billion (approximately $4.02 billion at exchange rates in effect on December 31, 2013) credit agreement (the "2012 Singapore Credit Facility"), providing for a fully funded SGD 4.6 billion (approximately $3.63 billion at exchange rates in effect on December 31, 2013) term loan (the “2012 Singapore Term Facility”) and a SGD 500.0 million (approximately $394.2 million at exchange rates in effect on December 31, 2013) revolving facility (the “2012 Singapore Revolving Facility”) that is available until November 25, 2017, which includes a SGD 100.0 million (approximately $78.8 million at exchange rates in effect on December 31, 2013) ancillary facility (the “2012 Singapore Ancillary Facility”). Borrowings under the 2012 Singapore Credit Facility were used to repay the outstanding balance under the previous Singapore credit facility. The Company recorded a $13.1 million loss on modification or early retirement of debt during the year ended December 31, 2012, as part of the refinancing of the facility. As of December 31, 2013, the Company had SGD 492.9 million (approximately $388.7 million at exchange rates in effect on December 31, 2013) available for borrowing, net of outstanding letters of credit. The indebtedness under the 2012 Singapore Credit Facility is collateralized by a first-priority security interest in substantially all of MBS’s assets, other than capital stock and similar ownership interests, certain furniture, fixtures and equipment and certain other excluded assets. The 2012 Singapore Term Facility matures on June 25, 2018, with MBS required to repay or prepay the 2012 Singapore Credit Facility under certain circumstances. Commencing with the quarterly period ending September 30, 2014, and at the end of each quarter thereafter, MBS is required to repay the outstanding 2012 Singapore Term Facility in an amount increasing from 2.0% (September 30, 2014) to 8.0% (March 31, 2017 to March 31, 2018) of the aggregate principal amount outstanding of SGD 4.6 billion (approximately $3.63 billion at exchange rates in effect on December 31, 2013). The remaining balance on the 2012 Singapore Term Facility is due on the maturity date. The 2012 Singapore Revolving Facility matures on December 25, 2017, and has no interim amortization payments. Borrowings under the 2012 Singapore Credit Facility bear interest at the Singapore Swap Offered Rate ("SOR") plus a spread of 1.85%. Beginning December 23, 2012, the spread for all outstanding loans is subject to reduction based on a ratio of debt to Adjusted EBITDA (interest rate set at approximately 1.8% as of December 31, 2013). MBS pays a standby commitment fee of 35% to 40% of the spread per annum on all undrawn amounts under the 2012 Singapore Revolving Facility. The weighted average interest rate for the 2012 Singapore Credit Facility was 1.9% and 2.1% for the years ended December 31, 2013 and 2012, respectively. In connection with the 2012 Singapore Credit Facility, the Company entered into an interest rate cap agreement in 2013, with a notional amount of SGD 100.0 million (approximately $78.8 million at exchange rates in effect on December 31, 2013), which has a three-year term and expires May 2016. The provisions of the interest rate cap agreement entitle the Company to receive from the counterparties the amounts, if any, by which the selected market interest rate exceeds the strike rate of 3.5% as stated in such agreement. This interest rate cap agreement was in addition to the following interest rate cap agreements entered into for the previous Singapore credit facility. To meet the requirements of the previous Singapore credit facility, the Company entered into nine interest rate cap agreements in 2008, with a combined notional amount of SGD 1.41 billion (approximately $1.1 billion at exchange rates in effect on December 31, 2013), all of which had three-year terms and expired between June and December 2011. The maturity date of one of the interest rate cap agreements, with a notional amount of SGD 50.0 million (approximately $39.4 million at exchange rates in effect on December 31, 2013), was extended until August 2013. During 2009, the Company entered into 14 additional interest rate cap agreements, with a combined notional amount of SGD 850.0 million (approximately $670.2 million at exchange rates in effect on December 31, 2013), all of which had three-year terms and expired between March and December 2012. During 2010, the Company entered into seven additional interest rate cap agreements, with a combined notional amount of SGD 365.0 million (approximately $287.8 million at exchange rates in effect on December 31, 2013), all of which had three-year terms and expired between January and June 2013. During 2011, the Company entered into 12 additional interest rate cap agreements, with a combined notional amount of SGD 1.15 billion (approximately $906.7 million at exchange rates in effect on December 31, 2013), all of which have three-year terms and expire between May and August 2014. During 2012, the Company entered into three additional interest rate cap agreements, with a combined notional amount of SGD 200.0 million (approximately $157.7 million at exchange rates in effect on December 31, 2013), all of which have three-year terms and expire between April and May 2015. The provisions of the interest rate cap agreements entitle the Company to receive from the counterparties the amounts, if any, by which the selected market interest rates exceed the strike rate (which range from 3.0% to 4.5%) as stated in such agreements. There was no net effect on interest expense as a result of these interest rate cap agreements for the years ended December 31, 2013, 2012 and 2011. The 2012 Singapore Credit Facility contains affirmative and negative covenants customary for such financings, including, but not limited to, limitations on liens, indebtedness, loans and guarantees, investments, acquisitions and asset sales, restricted payments, affiliate transactions and use of proceeds from the facilities. The 2012 Singapore Credit Facility also requires MBS to comply with financial covenants, including maximum ratios of total indebtedness to Adjusted EBITDA, minimum ratios of Adjusted EBITDA to interest expense and a positive net worth requirement. The maximum leverage ratio is 3.5x for the quarterly periods ending December 31, 2013 through December 31, 2014, and then decreases to, and remains at, 3.0x for all quarterly periods thereafter through maturity.The 2012 Singapore Credit Facility also contains events of default customary for such financings. Cash Flows from Financing Activities Cash flows from financing activities related to long-term debt and capital lease obligations are as follows (in thousands):
Scheduled Maturities of Capital Lease Obligations and Long-Term Debt Maturities of capital lease obligations and long-term debt outstanding as of December 31, 2013, are summarized as follows (in thousands):
Fair Value of Long-Term Debt The estimated fair value of the Company’s long-term debt as of December 31, 2013 and 2012, was approximately $9.72 billion and $10.12 billion, respectively, compared to its carrying value of $9.74 billion and $10.20 billion, respectively. The estimated fair value of the Company’s long-term debt is based on level 2 inputs (quoted prices in markets that are not active). |