S&P cuts Royal Caribbean

Standard & Poor's said it lowered the corporate credit rating on Royal Caribbean Cruises Ltd. to BB- from BB and removed ratings from CreditWatch, where they were placed with negative implications Jan. 30.

The outlook is negative.

"The downgrade reflects our revised expectations for 2009 and 2010, which now project net revenue yields to decline in the mid-teens percentage area in 2009," S&P analyst Ben Bubeck said in a statement.

The rating reflects an aggressive financial risk profile, the capital intensive nature of the cruise industry and the sensitivity of the travel and leisure sector to economic cycles, S&P said.

These factors are somewhat offset by the company's solid brands, a relatively young and high-quality fleet of ships, high barriers to entry in the cruise industry and an experienced management team, the agency said.

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