S&P assigns B- to Viking notes

S&P said it assigned B- issue-level and 5 recovery ratings to Viking Cruises Ltd.'s planned $720 million of senior unsecured notes due 2031. The 5 recovery rating indicates modest (10%-30%; rounded estimate: 15%) recovery for noteholders in default.

Viking plans to use the proceeds, along with some cash from the balance sheet, to repay its $675 million of 13% senior secured notes due 2025, also rated B- with 5 recovery ratings.

“The planned repayment will unencumber the company's river ship collateral and intellectual property (IP) that secured the 13% notes, which will modestly improve the recovery prospects for the unsecured notes and secured deficiency claims, though not enough to revise our recovery ratings,” S&P said in a press release.

The agency said it sees the refinancing probably cutting Viking’s interest costs given the 13% rate on 2025 notes.

“Notwithstanding the increase in its debt, the proposed transaction does not affect our B issuer credit rating on Viking. In addition, the company's 2023 booked position demonstrates that it is absorbing higher capacity as its occupancy recovers towards pre-pandemic levels,” the agency said.

The outlook is stable.

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