Re-Posting -- Carnival Is Over -- Its Debt Is "Junk" -- June 24, 2020

Earlier I posted:

The [C]arnival is over. LOL. I could be wrong on this, but it was my understanding that Prince MbS took a huge position in Carnival. There was talk he was going to turn the cruise ships into tankers (obviously that was a Mideast joke -- that would have been near-impossible -- the only similarity between cruise ships and oil tankers is that they both tend to float when at sea.  

More from the article:

Carnival’s recovery will be much slower in 2021 due to the fact the cruise line plans to return to normal operations in phases. Additionally, it will take several months for Carnival to return all its ships to service as the virus deters previous demand.

On Friday, industry group Cruise Lines International Association said it would further suspend voyages from U.S. ports until Sept. 15, meaning the world’s biggest cruise lines will now be going at least six months without American customers.

Last month, Carnival had teased a return to the seas as soon as Aug. 1. But in the past several weeks, many parts of the U.S. have seen an uptick in Covid-19 cases, including Florida, home to the world’s largest cruise port. Carnival Cruise Line, Carnival’s namesake brand, recently said its North American operations will remain paused through September 30, 2020.

S&P slashed the company’s long-term rating by three levels to BB-, from BBB-, saying the cruise line’s credit metrics are likely “to remain very weak through at least 2021” as it begins to slowly resume its operations. The cut from S&P hands the company a second high-yield credit rating, meaning its debt will leave investment-grade credit indexes.

Moody’s Investors Service cut the company to junk in May. In a statement Tuesday, it downgraded Carnival’s unsecured credit ratings by one notch to Ba2, the second-highest junk rank. It also rated Carnival’s planned term loan Baa3, the lowest investment-grade rating. S&P graded the new loan BB+, or one step lower.

That don't make it junk. LOL:

That Don't Make It Junk, Leonard Cohen