UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 22, 2005
LAS VEGAS SANDS, CORP.
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(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation)
00132373 27-0099920
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(Commission File Number) (IRS Employer Identification No.)
3355 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
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(Address of principal executive offices) (Zip Code)
(702) 414-1000
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
AMENDED AND RESTATED CREDIT AGREEMENT
On February 22, 2005, two subsidiaries of Las Vegas Sands Corp.
("LVSC"), Las Vegas Sands, Inc. ("LVSI") and its wholly-owned subsidiary,
Venetian Casino Resort, LLC ("Venetian" and, collectively, the "Borrowers"),
entered into an amended and restated credit agreement (the "Amended Credit
Agreement") governing their amended $1.620 billion senior secured credit
facility with Goldman Sachs Credit Partners L.P., as syndication agent, joint
lead arranger and joint lead bookrunner, The Bank of Nova Scotia, as
administrative agent, joint lead arranger and joint lead bookrunner, certain
lenders and Wells Fargo Foothill, Inc., The CIT Group\Equipment Financing, Inc.
and Commerzbank AG, as Documentation Agents. The amended credit facility
consists of a $970 million funded term loan, a $200 million delayed-draw term
loan available until August 20, 2005 and a $450 million revolving credit
facility. The amended credit facility also contains revised covenants to provide
greater flexibility.
The funded term loan was drawn at closing and provided the Borrowers
$970 million in proceeds. These proceeds, along with the net proceeds from
LVSC's recently completed senior note offering and cash on hand, were used to
repay term indebtedness under the prior secured credit facility, repurchase $542
million principal amount of the Borrowers' 11% mortgage notes in their
previously announced tender offer, and to pay related tender offer premiums, and
accrued and unpaid interest on the tendered notes and fees and expenses.
The indebtedness under the amended credit facility is guaranteed by
certain of the Borrowers' domestic subsidiaries (the "Guarantors"). The
Borrowers' obligations under the amended credit facility and the guarantees of
the Guarantors are secured by a first-priority security interest in
substantially all of the Borrowers' and Guarantors' assets, other than capital
stock. Borrowings under the term loan facilities and revolving loan facilities
bear interest, at the Borrowers' option, at either an adjusted Eurodollar rate
or at an alternative base rate, plus a spread of 1.75% of or 0.75%,
respectively, which spreads shall be decreased by 0.25% if the loans achieve a
rating of Ba2 or higher by Moody's and BB or higher by S&P subject to certain
additional conditions.
The amended credit facility contains affirmative, negative and
financial covenants customary for such financings. The amended credit facility
also requires the Borrowers to maintain the following financial ratios as of the
last day of each fiscal quarter:
o minimum ratio of consolidated adjusted EBITDA to consolidated interest
expense of not less than 1.5 to 1.0 until the last day of the fiscal
quarter in which construction of the Palazzo Casino Resort Hotel is
substantially complete, increasing thereafter as provided in the credit
facility;
o maximum ratio of consolidated total debt outstanding, including certain
debt of LVSC guaranteed by the Borrowers, to consolidated adjusted EBITDA
of not more than 7.25 to 1.0 until the last day of the fiscal quarter in
which construction of the Palazzo is substantially complete, decreasing
thereafter as provided in the amended credit facility;
o minimum consolidated net worth to be not less than $410.0 million plus 85%
of consolidated net income of the Borrowers and Guarantors for all fiscal
quarters;
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o maximum consolidated capital expenditures (excluding certain Palazzo-
related construction costs) for the periods from February 22, 2005 until
December 31, 2005 of not more than $80.0 million, plus carry-forward of
unused amounts from prior years, decreasing in fiscal years thereafter as
set forth in the amended credit facility.
The amended credit facility contains events of default customary for
such financings, including but not limited to nonpayment of principal, interest,
fees or other amounts when due; violation of covenants; failure of any
representation or warranty to be true in all material respects when made or
deemed made; cross default and cross acceleration; certain ERISA events; change
of control; dissolution; insolvency; bankruptcy events; material judgments; and
actual or asserted invalidity of the guarantees or security documents. Some of
these events of default allow for grace periods and materiality concepts.
The Bank of Nova Scotia and Goldman Sachs Credit Partners L.P. and
their respective affiliates have performed investment banking, financial
advisory, lending and/or commercial banking services for the Borrowers and their
affiliates from time to time, for which they have received customary
compensation, and may do so in the future.
6.375% SENIOR NOTES OF LVSC
In accordance with the conditions of the previously disclosed
offering by LVSC of 6.375% senior notes due 2015, the net proceeds of such
offering were released from escrow to LVSC. Simultaneously with such release, a
supplemental indenture to the indenture governing the senior notes was executed
by LVSC, certain of its domestic subsidiaries and the indenture trustee. Under
the supplemental indenture, the notes were jointly and severally guaranteed on a
senior unsecured basis by certain of LVSC's existing domestic subsidiaries
(including the Borrowers).
11% MORTGAGE NOTES OF THE BORROWERS
The Borrowers accepted for payment and purchased $542.3 million
principal amount of the 11% mortgage notes that were tendered in the Borrowers'
previously announced tender offer prior to the consent time. The total
consideration paid to the tendering holders was $1,166.56 per $1000 principal
amount of 11% mortgage notes (including a consent payment of $30 per $1000
principal amount of 11% mortgage notes). As a result, the amendments to the
indenture governing the mortgage notes became operative and substantially all of
the restrictive covenants and certain of the events of default were removed from
the indenture governing the mortgage notes.
The tender offer for the 11% mortgage notes remains open and is
scheduled to expire at 12 midnight New York City time, on March 1, 2005. Holders
of 11% mortgage notes who tender their notes after the consent time will not
receive the consent payment.
The Borrowers also have called the remaining outstanding 11%
mortgage notes for redemption at a price equal to 100% of the principal amount
thereof plus a make-whole premium as determined in accordance with the indenture
governing the 11% mortgage notes and, to the extent not included in the
make-whole premium, accrued interest.
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INTEREST EXPENSE SAVINGS AND CHARGES
LVSC expects to realize reductions in interest expense as a result
of these transactions. As a result of these transactions, LVSC estimates it will
achieve approximately $63 million in pre-tax interest savings in 2005 (estimated
to be approximately $72 million on an annualized basis) based upon an applicable
LIBOR rate of 2.59 percent. The estimated savings includes the effect of the
expected savings of approximately $31 million for 2005 (approximately $33
million on an annualized basis) previously announced in connection with the
Borrowers' February 1, 2005 redemption of approximately $291 million principal
amount of 11% mortgage notes (the "Equity Clawback"). The Equity Clawback
savings amounts include approximately $1 million each of amortization of
previously deferred offering costs. These transactions are expected to result in
a pre-tax charge to net income resulting from loss on early retirement of
indebtedness of approximately $133 million in the first quarter of 2005. This
estimated charge includes the approximately $39 million charge previously
announced in connection with the Equity Clawback.
FORWARD LOOKING STATEMENTS
Certain statements made in this Form 8-K are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Act"). Forward-looking statements include, without limitation, any
statement that may predict, forecast, indicate or imply future results,
performance or achievements, and may contain the words "believe," "anticipate,"
"expect," "estimate," "project," "will be," "will continue," "will likely
result," "is subject to," or similar words or phrases. Forward-looking
statements involve risks and uncertainties, which may cause actual results to
differ materially from the forward-looking statements. The risks and
uncertainties are detailed from time to time in reports filed by LVSC with the
Securities and Exchange Commission, including in its Forms 10-K and 10-Q. New
risk factors emerge from time to time and it is not possible for management to
predict all such risk factors, nor can it assess the impact of all such risk
factors on the business of LVSC or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT.
The information under "Amended and Restated Credit Agreement" and
"6.375% Senior Notes of LVSC" under Item 1.01 above is hereby deemed filed under
Item 2.03 as well.
ITEM 3.03. MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS
The information under "11% Mortgage Notes of the Borrowers" under
Item 1.01 above is hereby deemed filed under Item 3.03 as well.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 4.1 First Supplemental Indenture, dated as of February
22, 2005, by and among LVSC, the guarantors named
therein and U.S. Bank National Association as
trustee to the Indenture dated as of February 10,
2005 relating to the 6.375% senior notes due 2015
of LVSC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: February 23, 2005
LAS VEGAS SANDS CORP.
By: /s/ Bradley K. Serwin
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Name: Bradley K. Serwin
Title: General Counsel and Secretary
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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4.1 First Supplemental Indenture, dated as of February 22, 2005,
by and among LVSC, the guarantors named therein and U.S. Bank
National Association as trustee to the Indenture dated as of
February 10, 2005 relating to the 6.375% senior notes due 2015
of LVSC.