The Macau Metro Monitor, June 7, 2012




The 1-year lending and deposit rate will be cut by 25bps, effective June 8.  Banks will also be allowed to lend at 20% below the current floor for lending rates, greater than the previous 10% allowance. 



LVS is getting investment-grade treatment from banks.  Lenders participating in a S$4.6 billion ($3.6 billion) credit facility for MBS dropped demands that LVS use any excess cash at the end of its financial year to reduce the loan’s outstanding balance.  Typically, only high-grade borrowers are awarded such terms.


The loan will pay interest at a rate of 185bps more than the Singapore dollar swap offered rate.  The margin is 40bps narrower than what the company paid to borrow $3.2 billion in November, and 65bps less than its cost for $1.4 billion in 2010. Proceeds will be used to refinance debt and the loan may be split into a S$4.1 billion term facility that matures in six years and a S$500 million revolving credit facility due in 5.5 years.

Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.


In preparation for ISLE's FQ4 2012 earnings release tomorrow morning, we’ve put together the recent pertinent forward looking company commentary.



Feb 23 - FQ3 Conference Call

  • “Once Cape's open, we're truly sort of a de-leveraging story. We're probably leverage-neutral until Cape gets open. Once it gets open I think everybody is going to believe we're a de-leveraging story at that time. “
  • “I think, is that if it's gradual, if it inches its way up, it won't be near as dramatic as if somebody wakes up and it's gone up $1.00 overnight or $0.50 overnight. If it's a $0.10 here, $0.15 there, you got to understand, I mean in most of our markets it's not the trip to the casino, people aren't burning a tank of gas to come to the casino, it's the fact that they're spending $30 more a week on gas or $50 more a week on gas whatever overall that would have the impact on them.”
  • [Cape Girardeau] “Pending regulatory approval, we expect the property to be open in time for the Thanksgiving holiday this calendar year, at least a month ahead of our previous schedule.”
  • “For the rest of this year, we expect capital expenditures to be around $45 million with approximately half of that in Cape Girardeau.”
  • “Mississippi continues to be an issue, just in general. If you look across the entire state since the floods of the spring, it's been a real challenge.”
  • [Competition] “We're kind of seeing the same results that we're seeing in Kansas City [and Pompano]. We really haven't seen anything yet.”
  • “Lake Charles is probably the one place where we got a little work to do [on promotional spending] to get it in line with the revenue stream.”

HedgeyeRetail: Chart of the Day; BBBY E-mergency

BBBY’s recent acquisition binge is no coincidence. It’s core business metrics will look very different in the coming three years than they did over the past three.


1)      The ‘Amazon Risk’ story is well-telegraphed, but not well-quantified. Here you go…

  1. Only 1% of BBBY sales come from its e-commerce platform today. That rate has been declining as corporate resources have clearly been focused elsewhere. Unfortunately, e-commerce is something that is nearly impossible to close the gap on competitively without a meaningful capital investment.  While not a direct comp, WSM’s omni-channel model boasts e-commerce nearing 40% of sales.
  2. Demographics are an issue here... A full 65% of those currently using BBBY’s online services are over the age of 35. The younger on-line consumer is going somewhere else. When it comes to e-commerce, the young consumer is the good consumer. Additionally, industry data suggests that BBBY’s online exposure to the 55 & up demographic increased 272bps YoY to ~26% in 2011- bad for online spending. BBBY ranks 9th among the 94 companies we analyzed in terms of leverage to this spending group- WSM is ranked 24th.
  3. When looking at product overlap between BBBY and AMZN, our in store analysis suggests ~93% of product (exact match or very similar) sold through Bed Bath and Beyond stores can be purchased on 

2)      It’s base business is a good one, but not as good as some might think. BBBY outcomped the industry by an average of 6 percentage points from 4Q08-2Q11. This is the same time that the company consistently beat quarterly EPS expectations by an average of 20%, and it became known as one of the bullet-proof quality names in retail. It is definitely a quality name. But let’s not forget that this period of outperformance is the precise time it (helped cause and) benefitted from the bankruptcy of Linens n’ Things.


HedgeyeRetail: Chart of the Day; BBBY E-mergency - BBBY e mergency


HedgeyeRetail: Chart of the Day; BBBY E-mergency - BBBY chart 2 

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