Fresh from signing a pair of share deals earlier this week, Saipan casino operator Imperial Pacific International Holdings Limited has been assigned a first-time provisional corporate family rating of B2 by Moody’s Investors Service.
Hong Kong-listed Imperial Pacific International Holdings Limited is a subsidiary of British Virgin Islands-registered Inventive Star Limited, which is owned by businesswoman Cui Li Jie, and operates the temporary Best Sunshine Live casino while simultaneously developing its nearby and more permanent The Grand Mariana Casino Hotel And Resort.
Continuing the good news, the New York City-based ratings agency also attached a B1 grade to the bonds Imperial Pacific International Holdings Limited plans to issue while declaring that its outlook is “stable”.
“The B2 corporate family rating reflects the key strengths of Imperial Pacific International Holdings Limited’s casinos in Saipan including its monopoly status in Saipan’s gaming market as well as the island’s favorable tax regime for casinos and its friendly visa policy for Chinese visitors, the major customers of its casinos,” said Kaven Tsang, Vice-President and Senior Credit Officer for Moody’s Investors Service. “At the same time, the rating considers the company’s exposure to the high execution risks associated with the development of The Grand Mariana Casino Hotel And Resort, a new casino and hotel project, and the short track record of Imperial Pacific International Holdings Limited and the island of Saipan in the gaming business.”
Moody’s Investors Service declared that Imperial Pacific International Holdings Limited is also exposed to “the risks of cost overruns and delays in the completion” of The Grand Mariana Casino Hotel And Resort but that this is being “partly tempered by the strong gaming revenues generated by its temporary casino”.
“The company’s credit profile will improve as it completes the project and commences operations in 2017,” read a statement from Moody’s Investors Services. “Imperial Pacific International Holdings Limited’s focus on VIP gaming and its operation in a single location expose it to operating volatility and the evolving regulatory environment in Saipan’s gaming market. This strategy also increases the company’s working capital needs and the credit risk in relation to its customers. However, this risk is to some extent mitigated by the cooperative attitude of the regulators in Saipan and the ability to offer more attractive commissions to junkets and VIP customers, aided by the absence of a gaming tax.”
At the same time, fellow leading rating-agency Fitch Ratings has announced that it will be giving Imperial Pacific International Holdings Limited a long-term foreign currency issuer default rating of B while additionally predicting its outlook as “stable”.
Fitch Ratings also cited the operator’s short operating history in Saipan but explained that its mark is “supported by a low tax regime, attractive location, the use of junkets/guarantors in its VIP gaming business and addition of tourist amenities in Saipan by Imperial Pacific International Holdings Limited and other parties”.
On the other hand, it proclaimed that its rating is being constrained by the “high mobility” of VIP players, which can select from a number of competing and already established rival options.
“There is no certainty that the eventual performance of Imperial Pacific International Holdings Limited’s new casino in Saipan will match the performance of its temporary casino on the island and that of casinos in other Asian locations on a sustained basis,” read a statement from Fitch Ratings.