Oct. 1 (Bloomberg) -- Las Vegas Sands Corp.'s billionaire Chief Executive Officer Sheldon Adelson invested $475 million in the casino company to strengthen its capital after the shares lost more than half their value this year.

The Las Vegas-based company was at risk of tripping a U.S. loan covenant on Sept. 30, Joseph Greff, an analyst at J.P. Morgan Securities Inc., wrote in a note today. The cash injection ``has significantly more favorable terms'' than Las Vegas Sands would have secured in public credit markets, Greff said.

Casino cash flow is dwindling because of the U.S. economic slump, just as Las Vegas Sands embarks on its biggest expansion. The company is building a $12 billion, 20,000-room complex of hotels and casinos in Macau, China, the $4 billion Marina Bay Sands in Singapore, and the $800 million Sands Bethworks in Bethlehem, Pennsylvania.

The injection ``signals that LVS is backstopped in order to execute on its ambitious global growth plans,'' Bill Lerner, a Las Vegas-based analyst at Deutsche Bank AG, said today in a note. ``It also implies that management will do what it takes to protect its credit.''

Adelson and his family purchased convertible senior notes that mature in 2013 and pay 6.5 percent cash interest, the Las Vegas-based company said in a statement late yesterday. The notes are convertible to common stock at a price of $49.65.

Las Vegas Sands, the world's largest casino company by market value, fell $4.79, or 13 percent, to $31.32 at 4:01 p.m. in New York Stock Exchange composite trading.

Investors ``now face potential shareholder dilution, but should understand this needed liquidity injection,'' Joel Simkins, an analyst at Macquarie Securities USA Inc. in New York, said today in a note. ``The company stands in a better position to receive additional liquidity as it continues to meet with lenders throughout Asia.''

Shares Decline

The shares have declined 70 percent this year as U.S. consumers contending with higher gasoline and food prices, declining home values and job losses, curbed trips to Las Vegas since Sands opened its new Palazzo on the Strip in January.

``While the credit markets are experiencing turbulence, our strategy remains alive and well,'' Adelson, 75, said in the statement. ``This investment will strengthen our capitalization and liquidity position as we continue to execute our plans.''

Moody's Investors Services Inc. initiated multiple creditworthiness reviews of companies with business in the city, where gambling revenue dropped 6.7 percent in the first seven months of the year.

Competition has also intensified in Macau, the only part of China where casino gambling is legal. As more casinos and hotels are developed, authorities are limiting visits by mainland Chinese gamblers to Macau, which overtook the Vegas Strip as the world's biggest gambling hub in 2006.

Analysts including Todd Jordan, a managing director at Research Edge LLC, had expected Adelson to step in after he suggested he might during the company's last earnings call.

Adelson's Role

``One my closest friends says `Sheldon, don't worry about your height, you're the tallest person I know when you stand on your wallet','' Adelson said on the July 30 call. ``And I'm saying right now, the company will not have liquidity problems. Need I say more?''

``As I said back in '99, we're not going to have any problems and I'll say it again: We're not going to have any problems,'' Adelson said.

Adelson founded the Comdex computer expo in 1979, later selling the business and using the proceeds to build the Venetian Resort Hotel Casino in Las Vegas.

The drop in Las Vegas Sands shares eroded his wealth, pushing him to 15th on the Forbes magazine list of the 400 richest Americans published last month, from third a year ago. He owns more than 64 percent of Las Vegas Sands, according to data compiled by Bloomberg.

To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.net; Joseph Galante in San Francisco at jgalante3@bloomberg.net

Last Updated: October 1, 2008 16:33 EDT