S&P: Carnival outlook negative

Standard & Poor's said it revised its outlook on Carnival Corp. and Carnival plc to negative from stable and affirmed the ratings, including the A- corporate credit rating.

The agency said the outlook revision reflects its increasing concern that the currently weakened state of the economy and the pullback in consumer spending will pressure Carnival's ability to sustain credit measures appropriate for the current rating.

The rating on Carnival reflects a leading position in the global cruise industry, a solid operating track record, an experienced management team, a large cash flow base and very high barriers to new entrants, S&P said.

These factors are somewhat tempered by the capital-intense nature of the cruise industry, the travel and leisure sector's sensitivity to economic cycles and long lead times for new ships, the agency said.

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