LVS May Use IPO Proceeds to Reduce Debt Liabilities in the US

Deutsche Bank initiates coverage of Las Vegas Sands (NYSE: LVS) with a “buy” rating. The target price for LVS is set to $21.

Deutsche Bank believes that LVS transition to an Asian-centric company will drive the company’s share price going forward. LVS plans to spin off its Macau assets through its planned IPO. Deutsche Bank expects LVS to raise a maximum of $3.8 billion from this IPO.

While Las Vegas Sands may re-deploy some of the proceeds into its suspended projects on the Cotai Strip, Deutsche Bank believes that LVS will use most of the money to reduce its debt liabilities in the US. This is expected to restore the equity value of LVS’ properties. LVS is also poised to launch its Singapore property by end of Q1 2010.