14th Jul 2020 21:17
(Alliance News) - Moody's Investors Service on Tuesday said it assigned Carnival Corp's planned second lien note issuance a Ba1 rating.
At the same time, Moody's placed the long term ratings of Carnival Corp and Carnival PLC on review for downgrade.
The proceeds of Carnival's planned USD1 billion second lien senior secured note offering will be used to bolster the cruise operator's liquidity while US cruise operations continue to be suspended.
"The review for downgrade will focus on Carnival's recovery prospects in 2021 given the recent resurgence in coronavirus cases in the US increasing the uncertainty around the reopening of the US and the company's plans for the eventual return to service of its US operations, including what precautions will be put in place when sailings do resume and the associated incremental costs," said Pete Trombetta, Moody's lodging and cruise analyst.
The ratings agency said Carnival's credit profile is supported by its position as the largest worldwide cruise line in terms of revenue, fleet size and number of passengers carried, with significant geographic and brand diversification.
Carnival also benefits from its good liquidity given its significant cash balances and Moody's view that over the long run, the value proposition of a cruise vacation relative to land-based destinations as well as a group of loyal cruise customers supports a base level of demand once health safety concerns have been effectively addressed.
FTSE 250-listed Carnival shares closed down 5.2% in London on Tuesday at 947.60 pence each.
By Evelina Grecenko; [email protected]
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