24th Jun 2020 06:55
(Alliance News) - Moody's Investors Service on Tuesday assigned a Baa3 rating to Carnival's planned senior secured term loan B.
The proceeds of the planned USD1.5 billion senior secured term loan will be used to bolster the company's liquidity.
Carnival Corp and Carnival PLC own passenger cruise fleet, operating under multiple brands including Carnival Cruise Line, Holland America, Princess Cruises, AIDA Cruises, Costa Cruises, and P&O Cruises.
Moody's also said it downgraded the company's senior unsecured rating to Ba2 from Ba1. The outlook remains negative.
"The downgrade of Carnival's unsecured rating reflects the incremental UDS1.5 billion of secured debt ahead of it in the capital structure, which along with the company's March issuance of UDS4 billion of senior secured notes, would account for approximately 25% of the company's total debt," said Pete Trombetta, Moody's lodging and cruise analyst.
The negative outlook, meanwhile, reflects Carnival's high leverage and the uncertainty around pace and level of the recovery in demand that will enable the company to de-lever.
Looking forward, Moody's noted that it can downgrade Carnival further if indications over the coming months show that 2021 demand recovery may be weaker than expected, resulting in lower profitability.
By Evelina Grecenko; [email protected]
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