S&P rates Carnival notes BB+

S&P said it assigned its BB+ issue-level rating and 1 recovery rating Carnival Corp.'s proposed $900 million of second-priority senior secured notes due 2027 and placed the rating on CreditWatch with negative implications. The 1 recovery rating indicates S&P’s expectation for very high (90%-100%; rounded estimate: 95%) recovery for noteholders in the event of a default.

Proceeds are expected to be used to enhance its liquidity position, including by refinancing its upcoming debt maturities.

“The proposed debt does not materially alter our forecast for Carnival's adjusted leverage because we had previously assumed it would secure additional financing. Additionally, Carnival recently converted $885.6 million of its convertible notes, which we treat as debt, into equity. This largely offsets the proposed debt raise and modestly improves its forecast leverage for fiscal years 2021 and 2022. Nevertheless, we continue to expect the company's leverage to remain very weak and estimate it will likely exceed 10x in 2021,” S&P said in a press release.

All of Carnival’s ratings remain on CreditWatch, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.