Moody's rates Royal Caribbean liquidity SGL-2

Moody's Investors Service assigned Royal Caribbean Cruise Ltd. a speculative-grade liquidity rating of SGL-2, and confirmed its other ratings.

The liquidity rating considers a good liquidity position over the next 12 months.

Moody's expects that internally generated cash flow, cash on hand, plus its committed financing facilities will be more than sufficient to cover capital expenditures, dividends, scheduled amortization payments and the potential put on its 0% convertible notes.

Other ratings reflect high leverage and the likelihood that Royal Caribbean will be a net borrower in 2003 and 2004 as it completes a significant ship building program, Moody's said.

Moody's rates Flextronics notes Ba2

Moody's Investors Service assigned a Ba2 rating to Flextronics International Ltd.'s new $400 million 6½% senior subordinated notes due 2013 and confirmed its existing ratings including its $500 million 9 7/8% senior subordinated notes due 2010, €150 million 9¾% senior subordinated notes, due 2010 and $150 million 8¾% senior subordinated notes due 2007 at Ba2. The outlook is stable.

Moody's said the ratings take into account Flextronics' substantial restructuring activities and attendant charges over the past two years. The company's modest margins and diminished returns on invested capital and assets are somewhat mitigated by its stability of revenues, moderate debt leverage and diversification of end markets.

Moody's added that its ratings are based on Flextronics' moderate pro forma debt to adjusted EBITDA for the fiscal year just ended March 31, 2003 of 2.6 times, and solid 5.6 times adjusted fiscal 2003 EBITDA (2.4 times adjusted EBIT) coverage of pro forma interest requirements, after having added back restructuring charges, both cash and non-cash, taken in the first and third quarters of fiscal 2003.

The company additionally benefits from the advantages that are distinct to its worldwide footprint of modularly expansible facilities, particularly the square footage that it has installed in China.

These considerations are mitigated by the nearly $1.2 billion of restructuring charges taken by Flextronics since the beginning of 2001, including $70 million of payments to suppliers and third parties to terminate contractual agreements, related to the closures of previously acquired manufacturing facilities, Moody's said. Although the charges are by no means unique among the Tier One EMS (electronics manufacturing services) providers, they are, to date, among the steepest in magnitude.

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