Fitch affirms Carnival

Fitch Ratings said it affirmed Carnival Corp.'s issuer default rating, bank credit facility and senior unsecured debt at A- and its short-term debt and commercial paper ratings at F2.

The outlook is stable.

The agency said it has reviewed the impact of three potential transactions announced in December and February and has concluded that there will be no rating implications if the transaction are completed as planned. The transactions include a joint venture agreement with TUI AG, a joint venture agreement with Iberojet announced Feb. 8 and the sale of Windstar.

The two joint ventures agreements could increase the percentage of total debt that is structurally preferred if completed as planned. However, Fitch estimated that the percentage of assets encumbered by that debt is far lower than the percentage of debt that is structurally preferred and said the joint ventures may give the company increased asset utilization, the ability to manage/deploy capacity via ship transfers and an opportunity to further penetrate the fastest-growing European cruise market, Spain, and the second-largest European cruise market, Germany.

The agency said Carnival's ratings reflect the company's ample liquidity position, robust cash flow generation ability, market-leading competitive position and favorable industry-wide supply/demand outlook for the next few years.

Key credit concerns center on continued softness in Caribbean demand, the continuation of shareholder-friendly capital allocation decisions, the potential for a consumer-driven economic slowdown and fuel price volatility, Fitch said.

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