S&P rates Royal Caribbean notes B

S&P said it gave B issue-level and 4 recovery ratings to Royal Caribbean Cruises Ltd.'s upcoming $700 million of senior unsecured notes due 2027. The 4 recovery rating indicates an expectation for average (30%-50%; rounded estimate: 35%) recovery in default.

The company intends to use the proceeds to repay 2022 debt maturities.

“Because the planned transaction is largely debt for debt, it does not affect our B issuer credit rating or negative outlook on Royal. We continue to expect that the company's S&P Global Ratings-adjusted credit measures will remain very weak through 2022 given the continued gradual resumption of sailings over the next several months, which we forecast will entail continued cash burn (at least through early 2022),” S&P said in a press release.

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