Las Vegas Sands Corp (LVS) has agreed not to pay dividends until it has more than $1 billion in liquidity. It made this commitment to one of its lenders, the Bank of Nova Scotia, in return for it agreeing to relaxed requirements of maintaining liquidity.
LVS has unsecured revolving credit through the bank and other banks for $1.5 billion. It has reported a net loss of $820 million for the second quartered, compared to a net income of $954 million in the same period last year. This is attributable to the Covid-19 pandemic.
Under prior lending terms, LVS had been required to maintain a consolidated leverage ratio of 4:1 at the end of any quarter until the end of 2021. Under the revised terms, LVS will need to maintain a minimum liquidity of $350 million on the last day on each month.
In return LVS will refrain from issuing dividends until the end of the loan period. LVS had previously suspended issuing dividends in April due the pandemic, but had never formally agreed to not issuing them during the loan period.
