Fitch lowers Imperial Pacific rating to CCC

Fitch Ratings said it assigned a final long-term foreign-currency issuer default rating of CCC to Imperial Pacific International Holdings Ltd., which was downgraded from the expected B rating assigned in September 2016.

Fitch also said it downgraded the company's expected proposed dollar-denominated senior secured note issue to B- rating from BB-. The recovery rating remains at RR2.

The downgrades reflect the company's need to fund advances to customers and bear customers' credit risk due to the lack of licensed junket operators in Saipan, the agency said.

The company also has not secured sufficient long-term funding for the construction of its casino and resort, Fitch said.

The proposed notes, which will be issued by Imperial Pacific International (CNMI), LLC (Saipan), are rated two notches above Imperial’s issuer default rating because they are secured by essentially all the assets of the casino and resort under construction and guaranteed by Imperial Pacific Properties (CNMI), LLC, which owns the lease of the land on which the resort is built, and by the parent, IPI.

Fitch said it believes Imperial Pacific is on target to meet its construction deadline, but longer-term capital expenditure funding for the casino and hotel resort is not yet in place.

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