Fitch Ratings affirmed Carnival Corp.
's issuer default rating, bank credit facility
and senior unsecured debt at an investment grade of "A-," due to its strong liquidity position.
The rating service also affirmed the Miami-based company's short-term debt at "F2," which indicates a relatively low credit risk.
Fitch said possible negative influences include cyclical softness in Caribbean demand
, Carnival's shareholder-friendly capital allocation decisions, a potential consumer-driven economic slowdown, and volatile fuel prices.
Fitch said that the company's recent joint venture agreements with European tour operator TUI AG (TUI1.DE)
and Spanish travel company Iberojet
, as well as its proposed sale of the Windstar Cruises brand, are unlikely to affect its ratings.
Fitch noted that Carnival plans to spend about $3 billion to $3.5 billion annually on its shipbuilding program over the next few years. The rating service said the program is expected to generate about 8 percent annual capacity growth that could be leveraged to a slightly higher annual cash flow growth rate.
Fitch said the export credit financing will fund much of the shipbuilding program at rates below 5 percent. Carnival has about $1 billion of maturities in 2007 that is expected to be refinanced.
Carnival shares dropped 35 cents to $47.77 in midday trading on the New York Stock Exchange
Source: Houston Chronicle