Las Vegas Sands (LVS)

[Teamlasvegas]

Casinos shaky, but likely to survive: analyst
Tue Mar 3, 2009 11:05pm GMT
By Deena Beasley

NEW YORK (Reuters) - Shares and bonds of many casino operators are trading as if the companies are close to bankruptcy, but most have options to improve liquidity and will pull through the current recession, Deutsche Bank analyst Bill Lerner said on Tuesday.

"I think equity will change hands," Lerner said at the Reuters Travel and Leisure Summit in New York. "The composition of the industry will be different."

Casino stocks have been punished over the past year as gambling demand has fizzled, tight credit markets have jeopardized growth plans and the Chinese government has acted to slow down the booming Macau market.

Many casino operators piled on debt when borrowing was cheap and are now struggling to avoid default.

Companies like Las Vegas Sands (LVS.N) and MGM Mirage (MGM.N), which said on Tuesday it is still assessing its financial position and liquidity needs, have come close to violating debt covenants.

To raise cash, MGM in December agreed to sell its Treasure Island casino hotel to investor Phil Ruffin for $775 million.

"I wouldn't be surprised to see more from MGM," Lerner said. "I don't think any property is out of the question."

MGM owns 10 Las Vegas Strip casino-hotels, including Bellagio, Mandalay Bay and MGM Grand, as well as casino resorts in Detroit, Biloxi, Mississippi and elsewhere. Continued...


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