Posted at 12:10 p.m., Tuesday, January 8, 2008
Moody's downgrades NCL corporate family rating
Advertiser Staff
Moody's Investors Service has downgraded the corporate family rating of NCL Corp., operator of interisland cruises and other cruise lines, on projections that it will continue to draw on debt to finance new ships.The debt rating was lowered to B2 from B1, with a stable ratings outlook.
Moody's said downgrade pressure would evolve if the Hawai'i operations continue to underperform and other actions fall below expectations, while evidence emerges that Star Cruises is no longer willing to support NCL and or if further acquisitions occur such that debt rises.
NCL yesterday announced the closing of a $1 billion cash investment from Apollo Management LP, giving it a 50 percent stake. Star Cruises owns the remainder of the cruise line.
"The downgrade of the corporate family rating reflects Moody's view that the level of support provided to NCL from SCL (Star Cruises) will decline due to the fall in SCL's ownership level and its loss of board control," said Moody's analyst Kaven Tsang in a press statement.
But he added Apollo's investment had an upside also.
"Apollo's fresh capital injection into NCL will improve its financial and liquidity profiles. The equity fund's participation in management is also expected to enhance NCL"s business operation and corporate governance practices."
