Las Vegas Sands (LVS)

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"They've got an arsenal of weapons that they can launch to address liquidity and to some extent leverage," Lerner said.

The analyst said MGM will likely look to monetize part of its multi-tower CityCenter project on the Las Vegas Strip, which is slated to open in December.

"They could sell a hotel tower or a residential hotel tower to a hotelier," he said.

Lerner said MGM has enough liquidity to resolve 2009 through 2010 debt maturities, but "needs to quell concerns that they are going out of business."

Las Vegas Sands too has options to avoid violating debt covenants, he said.

Sands Chairman and CEO Sheldon Adelson said on Tuesday that the casino operator expects to avoid a debt default through a combination of cost cuts, the sale of two retail malls and increased business in Macau.

Lerner said other options could include the sale of other Macau assets or renegotiation with banks of debt terms.

"Covenant relief is not that big of a deal," he said. "You pay for it, but it happens in other industries all the time."

Despite the current downturn, about 14,000 new hotel rooms will open in Las Vegas between now and 2011, including projects like CityCenter, Fontainebleau Las Vegas and a new tower at the Hard Rock, Lerner estimated. Continued...