S&P assigns Royal Caribbean notes B

S&P said it assigned B issue-level and 4 recovery ratings to Royal Caribbean Cruises Ltd.'s proposed $1.25 billion of senior unsecured notes due 2028. The 4 recovery rating indicates expectations for average (30%-50%; rounded estimate: 30%) recovery in default.

The agency’s B issuer credit rating and negative outlook on Royal are unchanged. “Notwithstanding our forecast that the company's credit measures and operating cash flow generation will be unsustainable through 2021, we believe its credit measures could improve to more sustainable levels in 2022,” S&P said in a press release.

The company intends to use the proceeds to repay debt and use any remaining proceeds for general corporate purposes.

“Specifically, we expect Royal to repay the £300 million outstanding under its commercial paper (CP) program (unrated) and portions of its existing debt that mature in 2022, including portions of its $1.6 billion revolver and $1 billion term loan. Royal has launched amendments to its $1.6 billion revolver due 2022 and $1 billion term loan due 2022 to extend their maturities (the revolver to 2024 and the term loan to 2023). For the revolving and term loan lenders that consent to the amendments, Royal will reduce their respective commitments and outstanding balances by 20%,” S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.