S&P puts Royal Caribbean on watch

S&P said it placed all its Royal Caribbean Cruises Ltd. ratings on CreditWatch with negative implications.

“The CreditWatch placement follows the extended suspension of most of Royal’s sailings through February 2021, later than our prior assumption that sailings would be suspended through the end of 2020. As a result, we expect 2021 credit measures and operating cash flow generation will be even weaker and more negative, than our already anticipated very weak levels. Furthermore, we believe there is a heightened risk as to Royal’s ability to significantly improve credit measures to more manageable levels in 2022,” S&P said in a press release.

In resolving the placement, S&P said it plans to incorporate its updated views for the timeframe of the resumption of sailings into its forecast, including management’s plans to adhere to the CDC’s conditional sail order and what options it may have to improve profitability and cash flow.

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