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Royal Caribbean Cruises was upgraded by two notches from B1 to Ba2 by Moody’s. The credit rating agency also upgraded the ratings of Royal Caribbean’s backed senior secured debt to Baa2, backed senior unsecured debt to Ba1 and senior unsecured debt to Ba2. The upgrade comes on the back of strong operating performance shown by the company, driven by higher pricing, reduced cost inflation and capacity growth. Moody’s expects Royal Caribbean to achieve debt/EBITDA and EBITA/interest expense of about 3.5x and 3x, respectively, by end-2024 and the company’s free cash flows to improve which will help cover capex, including new ship deliveries.
Its dollar bonds inched slightly higher with its 5.5% 2028s up by 0.3 points to 98.1 cents on the dollar, yielding 6.03%.