Moody's ups TUI, rates notes B3

Moody's Ratings said it upgraded TUI Cruises GmbH's €524 million of senior unsecured notes to B3 from Caa1 and assigned a B3 instrument rating to the new €300 million senior unsecured notes with a five-year tenor to be issued.

The agency also upgraded the company’s corporate family rating to B1 from B2 and the probability of default rating to B1-PD from B2-PD.

“Today's rating upgrade reflects TUI Cruises' strong recovery in 2023 occupancy rate, reaching 98% (72%) for the Mein Schiff (MS) brand and 74% (58%) for Hapag-Lloyd Cruises (HPC) brand, combined with higher average ticket rates, up 5% for MS and 11% for HPC, and better-than-expected cost controls. Moody's adjusted debt/EBITDA was 4.8x and Moody's adjusted EBITA/interest expense was 4.2x as year-end 2023, better than our previous expectations,” the agency said in a press release.

Moody’s said it forecasts more earnings growth in 2024 and beyond buoyed by strong booking trends and increased capacity from two new ships which are expected to start operating later this year.

The positive outlook is maintained.

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