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 IslandsFriday, Jan 20, 2017

Saipan casino operator Imperial Pacific International says it is happy with the progress of the 902 Consultations between the CNMI and federal governments.

Pacific IslandsThursday, Jan 05, 2017

Saipan casino operator Imperial Pacific International Holdings has seemingly pushed back the opening of its new casino resort to the first quarter of 2017, deferring its earlier planned CNY opening.

Pacific IslandsTuesday, Jan 03, 2017

Imperial Pacific International Holdings has posted US$32.4 billion in unaudited VIP table games rolling chip turnover for the full-year 2016, according to the company’s filing to the Hong Kong Stock Exchange.

Pacific IslandsTuesday, Dec 27, 2016

A bond offering that Imperial Pacific was planning to use to fund construction of its Saipan casino has been put on hold, according to sources.

Pacific IslandsMonday, Dec 19, 2016

Saipan’s Labor Secretary Thomas E. Perez has requested for the federal court to issue a warrant to inspect the construction site of Imperial Pacific Resort in Garapan after an Occupational Safety and Health Administration was denied entry, Saipan Tribune reports.

Pacific IslandsMonday, Dec 05, 2016

Imperial Pacific’s temporary casino in Saipan raked in US$1.7 billion in VIP rolling chip for the month of November, according to its filing to the Hong Kong Stock Exchange.

Pacific IslandsTuesday, Nov 29, 2016

Imperial Pacific International Holdings Ltd., the operator of a casino in Saipan, may see a downgrade in its credit rating at Moody’s Investors Service.