S&P Lowers Cruise Ratings

Standard & Poor's lowered its ratings on the class A and B notes issued by Cruise Ship Finance Ltd. to triple-'B'-minus from triple-'B' and removed the ratings from CreditWatch with negative implications, where they had been placed on Jan. 25, 2001. The rating action reflects Standard & Poor's Jan. 22, 2001 downgrade of Royal Caribbean Cruises Ltd.'s (RCL) corporate rating to triple-'B'-minus from triple-'B'. As the underlying obligor on the receivables held by Cruise Ship, RCL is a supporting rating to the transaction. In its analysis of the consequences of RCL's downgrade, Standard & Poor's took into consideration the fact that in a situation where RCL is in default, Cruise Ship's noteholders have access to the sale proceeds of the ships that are the object of the receivables on RCL. In addition, because only 85% of the purchase price paid by RCL for the ships was financed by Cruise Ship, and a 25% residual market value guarantee was provided directly by Alstom Holdings to Cruise Ship, a special-purpose entity, noteholders benefit from additional protection against potential market value decline.