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Saturday, 8 November 2008
Temasek Bond Risk Rises on Concern of Casino Rescue
Default protection costs on Temasek Holdings Pte, Singapore’s state-owned investment company, rose on concern the government may guarantee completion of Las Vegas Sands Corp.’s $4 billion casino project in the city-state.
Temasek Bond Risk Rises on Concern of Casino Rescue
By Oliver Biggadike and Robert Fenner, Bloomberg 7 November 2008
Default protection costs on Temasek Holdings Pte, Singapore’s state-owned investment company, rose on concern the government may guarantee completion of Las Vegas Sands Corp.’s $4 billion casino project in the city-state.
Five-year credit-default swaps on Temasek, which manages about $130 billion, advanced 15 basis points to 113, JPMorgan Chase & Co. data show. The price, which climbs as perceptions of credit quality deteriorate, is equivalent to $113,000 annually to protect $10 million of bonds.
“People are losing money in the stock market so that would affect appetite for gambling,” said Gabriel Chan, an analyst at Credit Suisse Group AG in Hong Kong.
Sheldon Adelson, the U.S. company’s billionaire chairman, met with Singapore officials to discuss funding as a cash shortage threatens projects in Singapore and Macau, according to people familiar with the talks. Las Vegas Sands said yesterday that it probably won’t meet the requirements of some loans unless it cuts spending, boosts earnings at its Las Vegas Strip casinos and raises more capital.
Crown Swaps Rise
Credit-default swaps on Crown Ltd., Australia’s biggest casino owner, also rose after Las Vegas Sands’ warning. Contracts on Crown rose as much as 85 basis points today to trade at 490, according to Citigroup prices.
Crown, controlled by billionaire James Packer, led more than $3 billion of acquisitions in the U.S. last year, including a $1.75 billion agreement to buy Cannery Casino Resorts LLC, which has three venues in the Las Vegas region and a racetrack in Pittsburgh. The Sydney-based company also owns 38 percent of Melco Crown Entertainment Macau Ltd., which operates one casino in Macau and is building another.
In August, Crown took A$181 million of charges against its U.S. investments, including writing down stakes in Harrah’s Entertainment Inc. and Station Casinos Group.
Credit-default swaps are used to protect against or speculate on default. They pay the buyer face value in exchange for the underlying securities, or the cash equivalent, if a borrower fails to adhere to its debt agreements.
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Temasek Bond Risk Rises on Concern of Casino Rescue
By Oliver Biggadike and Robert Fenner, Bloomberg
7 November 2008
Default protection costs on Temasek Holdings Pte, Singapore’s state-owned investment company, rose on concern the government may guarantee completion of Las Vegas Sands Corp.’s $4 billion casino project in the city-state.
Five-year credit-default swaps on Temasek, which manages about $130 billion, advanced 15 basis points to 113, JPMorgan Chase & Co. data show. The price, which climbs as perceptions of credit quality deteriorate, is equivalent to $113,000 annually to protect $10 million of bonds.
“People are losing money in the stock market so that would affect appetite for gambling,” said Gabriel Chan, an analyst at Credit Suisse Group AG in Hong Kong.
Sheldon Adelson, the U.S. company’s billionaire chairman, met with Singapore officials to discuss funding as a cash shortage threatens projects in Singapore and Macau, according to people familiar with the talks. Las Vegas Sands said yesterday that it probably won’t meet the requirements of some loans unless it cuts spending, boosts earnings at its Las Vegas Strip casinos and raises more capital.
Crown Swaps Rise
Credit-default swaps on Crown Ltd., Australia’s biggest casino owner, also rose after Las Vegas Sands’ warning. Contracts on Crown rose as much as 85 basis points today to trade at 490, according to Citigroup prices.
Crown, controlled by billionaire James Packer, led more than $3 billion of acquisitions in the U.S. last year, including a $1.75 billion agreement to buy Cannery Casino Resorts LLC, which has three venues in the Las Vegas region and a racetrack in Pittsburgh. The Sydney-based company also owns 38 percent of Melco Crown Entertainment Macau Ltd., which operates one casino in Macau and is building another.
In August, Crown took A$181 million of charges against its U.S. investments, including writing down stakes in Harrah’s Entertainment Inc. and Station Casinos Group.
Credit-default swaps are used to protect against or speculate on default. They pay the buyer face value in exchange for the underlying securities, or the cash equivalent, if a borrower fails to adhere to its debt agreements.
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