Hong Kong based Imperial Pacific which is the parent company of Best Sunshine International, the company that runs the Best Sunshine Live casino in Saipan is looking to attract investors by issuing high-yield bonds in a bid to raise around $300 million to complete its Grand Mariana integrated resort on the Saipan Island, which is a part of the Commonwealth of the Northern Mariana Islands (CNMI).
The company recently submitted a filing to the Hong Kong Stock Exchange confirming its plan to issue high-yield bonds but has not yet determined the offer price, interest rate or the aggregate principal amount of these bonds. The company needs around $380 million to complete its Grand Mariana project and expects to raise around $300 million from the bonds. While the terms and conditions governing the notes are yet to be finalized, Imperial Pacific has stated that notes will be secured by the issuing casino’s assets and resort which is under construction and will be guaranteed by the parent company and the owner of the land lease.
Imperial Pacific International (CNMI) LLC (Saipan), a subsidiary of Imperial Pacific is expected to release the notes which will be rated B1/BB- (Moody’s/Fitch). Just last week, Fitch Ratings stated that it was going to give Imperial Pacific International Holdings Ltd a ‘B(EXP)’ rating on its Long-Term Foreign-Currency Issuer Default Rating (IDR).
The rating gives Imperial Pacific a stable outlook in Saipan as its temporary casino has performed extremely well in its short existence, attracting a high number of VIP gamblers from Mainland China and other parts of the world. Fitch Ratings stated that the positive ratings were also due to the fact that Saipan had a low tax rate, the increase in tourist amenities by the government, the collaboration of Best Sunshine and junket operators and the attractive location of the Saipan Islands.
In part the Reuters report stated; “If Imperial Pacific raises other funding, this will also be added to this disbursement account, which will maintain a minimum balance of $480 million before any funds can be used for other purposes, providing a buffer of $100 million against cost overruns. All accounts are pledged to the benefit of prospective investors.”
The rolling chip volumes for the temporary casino during the first seven months of 2016 have exceeded $15 billion. Imperial Pacific will use the performance of its temporary Saipan casino to attract investors but Fitch Ratings has also stated that the performance of the Saipan casino is constrained due to the high mobility of the VIP market segment as they have a number of other options to choose from.
Fitch went on to say that there is no guarantee that the new casino will perform as well as the temporary casino on a long term basis as VIP gamblers continue to seek out other Asian casino destinations.