Gaming | Imperial Pacific’s junk rating may be lowered by Moody’s

Imperial Pacific’s Best Sunshine Live casino

Imperial Pacific International Holdings Ltd., the operator of a casino on the U.S. territory of Saipan, had its credit rating put on review for possible downgrade at Moody’s Investors Service because of concern over funding of a project to build a new resort on the island.

The review of the B2 rating – five levels below investment grade – reflects a delay in selling bonds that will help finance the project, Moody’s vice-president Kaven Tsang said in a statement Monday. The evaluation will focus on the Hong Kong-based company’s “ability to secure sufficient long-term funding” and the subsequent impact on its gaming license, as well as the “management of money laundering risk to ensure that its gaming business in Saipan is sustainable,” Moody’s said.

Shares of Imperial Pacific fell 0.9 percent in Hong Kong trading yesterday, paring a decline of as much as 4.6 percent.

Imperial Pacific didn’t respond to e-mailed and phone requests for comment. Moody’s said it will withdraw its provisional B1 rating for the bonds because they have not been issued as planned.

Imperial Pacific’s Best Sunshine Live casino on the remote Pacific island has posted per-table VIP revenues far in excess of those at the grandest gambling resorts in Macau, the world’s number-
one casino hub. The volume of cash has drawn the attention of the U.S. Treasury’s Financial Crimes Enforcement Network, which is responsible for alerting prosecutors and other authorities of suspicious financial flows, a person familiar with the matter said this month.

The company, which until a few years ago was focused on the distribution of frozen food, is in the process of building a much larger casino and resort complex, and plans to sell as much as $650 million in bonds to fund the project. Its chief executive officer, Mark Brown, was formerly a senior executive in U.S. president-elect Donald Trump’s Atlantic City casino operations.

Imperial Pacific has said that its Saipan operation complies with all relevant money-laundering and other regulations, and that bets are closely monitored by local and U.S. regulators. It has also said it is not aware of any investigation of the casino by the Financial Crimes Enforcement Network. Matthew Campbell, Bloomberg