S&P rates Royal Caribbean notes B

S&P said it assigned B issue-level and 4 recovery ratings to Royal Caribbean Cruises Ltd.'s planned $1 billion of senior unsecured notes due 2027. The 4 recovery rating indicates average (30%-50%; rounded estimate: 35%) recovery for noteholders in default.

The company intends to use the proceeds to repay its 2022 and/or 2023 debt maturities.

“Because the transaction is largely debt for debt, our B issuer credit rating and negative outlook are unchanged. We still expect Royal Caribbean's S&P Global Ratings-adjusted credit measures to remain very weak in fiscal year 2022 because of pandemic-related incremental debt and the gradual recovery of its operations,” the agency said in a press release.

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