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Royal Caribbean, Norwegian Cruise Line Are Put on Credit Watch Over Extended Suspensions
Barrons ^ | Dec. 11, 2020 10:30 am ET | Lawrence C. Strauss

Posted on 12/11/2020 11:06:57 AM PST by Capt. Tom

Royal Caribbean had to bring its cruise ship Quantum of the Seas to port this past week after a passenger aboard the ‘cruise to nowhere’ tested positive for Covid-19. snip S&P Global Ratings said it has placed Royal Caribbean Group (ticker: RCL) on credit watch negative following the suspension of cruises. It did the same for NCL, a subsidiary of Norwegian Cruise Line Holdings (NCLH) that holds debt.

In a press release this week, the rating firm said Royal Caribbean’s listing “reflects the heightened likelihood that we will lower our rating within the next few months, given a high degree of uncertainty as to Royal’s recovery path and its ability to substantially improve leverage in 2022 from what will likely be unsustainable levels in 2021.”

Royal Caribbean declined to comment on the action.

As most of its ships sit idle, Royal Caribbean, like its peers, has been burning through hundreds of millions of dollars of cash every month. In late October, the company estimated that its monthly cash burn was averaging about $250 million to $290 million “during a prolonged suspension of operations.”

“We expect [Norwegian] to burn more cash relative to our previous expectations and for leverage to remain very high in 2021,” according to S&P Global Ratings.

As of Sept. 30, the company’s long-term debt totaled $10.5 billion, up from $6.1 billion at the end of 2019. The company’s CFO, Mark Kempa, told analysts during the third-quarter earnings call last month that he expected the fourth-quarter monthly cash burn to be around $175 million “if all of our vessels remained in their lay-up status at minimum manning levels and did not begin preparations for a return to service.”

(Excerpt) Read more at barrons.com ...


TOPICS: Chit/Chat; Travel
KEYWORDS: barrons; cruiselines
I believe us Freepers who are cruisers know the plight of the Cruise Industry, and realistically don't see an end to it even in 2021 based on monthly cancellations and panicky reactions to corona virus by countries all over the world.

Cracks in the remaining Cruise Industry are starting to show and talk of a 2022 recovery are starting to be floated instead of the next month scenarios we have been hearing for the last 6 months.

No income, and BILLIONS in expenses, and spending borrowed money plus your own money has to end badly if it continues thru 2020. - Tom

1 posted on 12/11/2020 11:06:57 AM PST by Capt. Tom
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To: Capt. Tom
Worth noting a passenger aboard the ‘cruise to nowhere’ tested positive for Covid-19 doesn't mean the passenger had covid. Which, as confirmed onshore, he didn't. That said, the arrival of a vaccine, ironically, puts recovery off till at least the second half of 2021, since it means passengers will need "vaccine cards" to board. Cash burn, nothing that can't be solved by conversion of debt to equity. I recognize the cruise industry isn't thought to be US based, but they're the only major employer to be treated by the government like the corner hot dog stand. Not a condemnation of the government for not helping the cruise industry, they (their brands and operations) will survive, rather our treatment of small business'
2 posted on 12/11/2020 11:20:16 AM PST by SJackson (We don't let them have ideas. Why would we let them have guns. Joseph Stalin)
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To: Capt. Tom

I fully expect to be telling grandchildren of the the Oasis class ships being a marvel at sea going from workout, to ice show, to 5 star dinner to elegant theater inside of a 3 hour window.

I can’t imagine how they can survive the next 18 months after enduring the past 8.


3 posted on 12/11/2020 11:27:49 AM PST by PittsburghAfterDark (There is no one more racist than a white liberal.)
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To: PittsburghAfterDark

Isn’t the end of leisure travel part of the Green Reset? Travel will once again be the domain of the wealthy.


4 posted on 12/11/2020 11:47:05 AM PST by OpusatFR
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To: SJackson; gibsonguy; NormsRevenge; Chgogal; Ann Archy; dennisw; entropy12; Captain Walker; ...
Worth noting a passenger aboard the ‘cruise to nowhere’ tested positive for Covid-19 doesn't mean the passenger had covid. Which, as confirmed onshore, he didn't. That said, the arrival of a vaccine, ironically, puts recovery off till at least the second half of 2021, since it means passengers will need "vaccine cards" to board. Cash burn, nothing that can't be solved by conversion of debt to equity. snip...

The overreaction in Singapore to the Covid was one of the things I was mentioning in my post.

Vaccinations won't bail out the Cruise lines , since a lot of young healthy people won't take them. Right now, some medical groups in this country are letting their people opt out of the vaccines for COVID-19. I have spoken to several older people who won't take the vaccine, and the same position is held by some local talk show hosts.

The creditors who loaned the money to the cruise lines may demand a reorganization of a Cruise Line so they don't lose their loaned money. Pulmantur, a British Cruise line seems to have been put out of business that way.

In our country right now , two democrat politicians have asked the CDC for all Covid -19 info on Cruise Ships to go to their committee. You know that is not good news for the Cruise lines. -Tom

5 posted on 12/11/2020 11:47:25 AM PST by Capt. Tom (It's COVID 2020 - The Events, not us, are in charge -Tom)
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To: PittsburghAfterDark
I fully expect to be telling grandchildren of the the Oasis class ships being a marvel at sea going from workout, to ice show, to 5 star dinner to elegant theater inside of a 3 hour window.
I can’t imagine how they can survive the next 18 months after enduring the past 8.

Always have in the back of you mind; "The bigger the bundle-the bigger the bungle." -Tom

6 posted on 12/11/2020 11:51:52 AM PST by Capt. Tom (It's COVID 2020 - The Events, not us, are in charge -Tom)
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To: Capt. Tom

I already had the best vaccine possible. covid-19 cells invaded my body during the crowded Carnival cruise ending on February 29th, I had minor cough after cruise for 2 weeks, then my body killed off the virus and in the process I acquired immunity from further covid-19 sickness, at least for some time.

Virus have attacked humans for 10 million years and our species is bigger than ever. Nature is a miracle on how it creates immunity in our bodies. During my last 60 years in USA I never was sick with diarrhea. Because during my first 20 years of life, I had exposure to those germs growing up in India.

The proper method to fight any virus is for healthy people to get exposed and develop immunity. Shutdowns prevent people from acquiring immunity and the pandemic is prolonged. JMHO.


7 posted on 12/11/2020 12:04:34 PM PST by entropy12 (Stalin would have loved the Dominion machines. Follow the money to explain news.)
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To: entropy12
The proper method to fight any virus is for healthy people to get exposed and develop immunity. Shutdowns prevent people from acquiring immunity and the pandemic is prolonged. JMHO.

Agreed.
The so called vaccine experts can't even answer an obvious question like; If people are vaccinated and become immune to Covid- 19, and later on come in contact with the virus, can they spread the virus to other people who are not immune, and haven' been vaccinated? -Tom

8 posted on 12/11/2020 12:13:49 PM PST by Capt. Tom (It's COVID 2020 - The Events, not us, are in charge -Tom)
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To: OpusatFR
Travel will once again be the domain of the wealthy.

Cruise ships will be "bought" by the UN at $0.10 on the Dollar and used to haul "refugees" from the Mid-East and North Africa to Europe and (if the Biden/Harris steal succeeds) to the USA, to be farmed out to small communities in "Fly Over Country".

9 posted on 12/11/2020 1:05:51 PM PST by BwanaNdege ( Experience is the best teacher, but if you can accept it 2nd hand, the tuition is less!)
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To: Capt. Tom

Hmm.

Been a Carnival ccl stockholder for maybe 4 years now.

They paid a dividend every quarter. I haven’t looked but has that stopped ?


10 posted on 12/11/2020 1:41:42 PM PST by George from New England
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To: Capt. Tom

My common sense (which I have in tons) tells me that an virus infected person is not shooting streams of virus cells into the air unless coughing or sneezing or talking loud near you.

But virus cells could be present on his hands from previously scratching nose or touching mouth. So avoid shaking hands as much as possible. Even if you shake hands, virus can not penetrate tough skin on fingers but if you touch your contaminated fingers to your mouth or nose, the virus cell can enter your body.

At the end of day all depends on how many virus cells entered your body. If only a few, good chance your body will be able to kill them and acquire immunity in the process. That is the ideal situation to develop herd immunity.


11 posted on 12/11/2020 1:56:36 PM PST by entropy12 (Stalin would have loved the Dominion machines. Follow the money to explain news.)
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To: George from New England
Been a Carnival ccl stockholder for maybe 4 years now.
They paid a dividend every quarter. I haven’t looked but has that stopped ?

I wouldn't expect a business as usual dividend from Carnival, since they borrowed Billions to stay afloat. -Tom

12 posted on 12/11/2020 2:07:17 PM PST by Capt. Tom (It's COVID 2020 - The Events, not us, are in charge -Tom)
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To: George from New England

I would sell your stock in that cruise line. It will take 10 years to recover if ever. Bankruptcy ahead. You can bet that institutional invests have bailed or will bail.

For the record I don’t own any cruise line stock. But I do own lots of Southwest Airline stock. I think they will survive and thrive.


13 posted on 12/11/2020 5:10:45 PM PST by ncfool (Joe Biden USSA.. United Socialist state of aMeriKa...... 11.3.2020 - President in waiting Kama-la-la)
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