S&P: Royal Caribbean view stable

Standard & Poor's said it revised the outlook for Royal Caribbean Cruises Ltd. to stable from negative and affirmed its BB- corporate credit rating.

"The outlook revision to stable reflects our expectation that improving booking and pricing trends so far in 2010 are sustainable over the intermediate term, and that the company's net revenue yield measure will increase 3% to 4% over each of the next two years," S&P analyst Emile Courtney said in a statement.

With continued EBITDA growth expected into 2011, S&P said it believes Royal could reduce adjusted leverage to below 7x in early 2011.

The BB- rating reflects a highly leveraged financial risk profile, the capital-intensive nature of the cruise industry and the sensitivity of the travel and leisure sector to economic cycles, the agency said.

Royal'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 somewhat offset these factors, the agency noted.

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