Imperial Pacific earns Fitch downgrade

Fitch Ratings has downgraded its rating for Hong Kong-listed Imperial Pacific International Holdings Limited, after concerns it has still not yet secured sufficient long-term funding for the construction of its casino and resort.

“Fitch believes IPI is on target to meet its construction deadline, but longer-term capex funding for the casino and hotel resort is not yet in place…. Failure to secure funding for the completion of both construction phases may further pressure IPI's liquidity,” noted the ratings agency on Wednesday.

The downgrade also “reflects the company's need to fund advances to customers and bear customers' credit risk due to the lack of licensed junket operators in Saipan,” added Fitch.

“So far only one junket has been licensed by the Commonwealth Casino Commission of Saipan. Thus, IPI has been operating its VIP business through third-party introductions and internal marketing, with IPI granting credit directly to VIP customers who are partly backed by guarantors. Fitch believes IPI's receivable days have expanded well beyond 100 days in view of the strong VIP rolling chips volume in the past six months. Operating cash generation is likely to be low, despite strong revenue growth.”

The ratings agency has lowered the casino operator’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’, down from the ‘B(EXP)’ expected rating assigned in September 2016.

It has also downgraded the casino resort operator's proposed US dollar senior secured note issue to an expected 'B-(EXP)' rating, from 'BB-(EXP)'.

More news from this jurisdiction

Pacific IslandsWednesday, Nov 22, 2017

The Commonwealth Casino Commission is recommending to set the maximum fine imposed on Imperial Pacific International to $200,000.

Pacific IslandsMonday, Nov 20, 2017

The House of Representatives is looking at increasing the maximum fine that can be imposed on players, licensees, vendors and employees of Imperial Pacific International under a new bill, local media reports.

Pacific IslandsTuesday, Nov 07, 2017

Slot machines owner Sin Ho Nam and operator Dan Bin Choi LLC are suing the CNMI government over new zoning restrictions that have forced the company to relocate its slot machines.

Pacific IslandsTuesday, Oct 31, 2017

A “wind-up” petition has been filed against Imperial Pacific International over allegations that the company defaulted in paying construction management fees of approximately HK$2.6 million (US$333,284)

Pacific IslandsWednesday, Oct 25, 2017

Saipan casino operator Imperial Pacific International says it has invested over half-a-billion dollars into the CNMI local economy.

Pacific IslandsMonday, Sep 25, 2017

37 illegal workers who worked on Imperial Pacific’s casino and hotel have refused an offer to be paid and sent back home to China.

Pacific IslandsMonday, Sep 18, 2017

Imperial Pacific International says impairment of the group’s trade receivables in the six months ended June 30, 2017 amounted to HK$2.1 billion (US$268.7 million).