Imperial Pacific assigned B(EXP) rating: Fitch

Fitch Ratings says it expects to assign Imperial Pacific International Holdings Ltd a Long-Term Foreign-Currency Issuer Default Rating (IDR) of ‘B(EXP)’ with a stable outlook.

According to the ratings agency, the rating reflects the operator’s short operating history in Saipan, driven mostly by the volatile high-rolling VIP segment. The ratings are also “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 IPI and other parties,” said the firm.

On the other hand, the rating is constrained by the “high mobility” of VIP players, who already have a number of options of established casinos to choose from.

“There is no certainty that the eventual performance of IPI’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,” said Fitch.

Last month, Imperial Pacific announced record growth in both revenue and profit for the six months to end-June, but said further growth is likely to be capped until its new casino and hotel opens next year.

Total revenue reached HK$3.98 billion ($513 million), with revenue from VIP gaming operations making up the bulk at HK$3.82 billion. Mass gaming operations generated HK$122.2 million, while slots and ETGs came in at HK$26.8 million. Adjusted EBITDA was HK$1.24 billion, compared with a loss on that basis of HK$82.59 million.

The temporary casino is now operating a total of 16 VIP tables, up from 12 at the year end, though its mass tables have dropped to 32 from 34.