S&P cuts Royal Caribbean

S&P said it downgraded its ratings for Royal Caribbean Cruises Ltd. and the company’s unsecured debt to BB from BBB- and removed them from CreditWatch with negative implications, where they were placed on March 10.

“We believe the suspension of cruises may extend into the third quarter and spike Royal's leverage in 2020, and that it's unlikely to improve to under 3.75x in 2021, the threshold at the previous BBB- rating. In our assumed containment scenario, we believe Royal can begin to recover starting in the fourth quarter of 2020 and into 2021,” said S&P in a press release.

However, the agency said a global recession and travel fears could prolong the company’s recovery.

The outlook is negative.

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