In a Thursday press release, Fitch Ratings said they have not assigned a rating to US$70 million in 8.5% per annum unsecured notes that Hong Kong-listed Imperial Pacific International Holdings Limited said they had completed an issue of on February 8, 2017.

The notes, issued by the sole Saipan casino license holder, should not be confused with an earlier proposed issuance of US dollar senior secured notes that the company announced that it planned to issue earlier. After analyzing preliminary documentation in regard to those notes, announced in January, Fitch assigned an expected ‘B-(EXP)’ rating to that proposed issuance.

The rating agency said that the US$70 million in unsecured notes doesn’t affect IPI’s Issuer Default Rating of ‘CCC’. That rating it said, is constrained by the higher VIP customer-receivable risks it faces due to the lack of junkets being licensed, as well as Imperial Pacific’s Capital expenditure, or CapEx, funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. Fitch said in the release that IPI’s material capex requires more funding than is covered by the debt issuance. Other concerns include the company’s concentration on VIP business which the ratings firm considers ‘highly volatile’.

In support of their ratings assessment, Fitch noted that IPI being the only casino operator to enjoy Saipan’s legal and geographical advantages and active tourism development lends veracity to the rating in a positive light.

Former CEO Mark Brown told local media in early January that he had been traveling extensively to promote Saipan to investors. Brown, who was promoted to Chairman of the Board recently, oversaw the opening of the company’s Best Sunshine Live ‘temporary’ casino on the island along with its record rolling chip turnover. January 2017 saw US$5,589,965,500 in
VIP action at its 16 tables according to filings with the HKEx.

In a January 2017 filing the company said it planned to open its permanent casino, the Phase I, Imperial Pacific Resort in Garapan before May.


This article has been updated to correct a relationship between rated notes and the company’s issuer default rating