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Published on 1/17/2012 in the Prospect News Convertibles Daily and Prospect News Investment Grade Daily.

S&P: No change to Carnival

Standard & Poor's said its ratings on Carnival Corp., and other rated cruise operators including Royal Caribbean Cruises Ltd. and NCL Corp. Ltd., are currently unaffected by the grounding of the Costa Concordia.

The agency said the cause of this tragic event, reportedly claiming at least five lives, is unclear.

S&P said Carnival Corp.'s operating performance in 2012 will be negatively impacted by the loss of this ship from its fleet, as well as any costs associated with the event, including investigation into the cause, amending or refunding future itineraries scheduled on the Costa Concordia, and any investment associated with restoring the reputation of the Costa brand, which is one of Carnival's largest and most well known.

In addition, while it is difficult to assess the degree that a tragic event such as this could have on the overall cruise sector, the agency said it believes there is the potential that this event could weigh on booking trends across other cruise brands.


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