S&P lifts Viking Cruises view to stable

Standard & Poor’s said it affirmed the B+ corporate credit rating on Viking Cruises Ltd. and revised the outlook to stable from negative.

The agency also said it affirmed the B+ rating on Viking’s increased aggregate senior unsecured 8½% notes due 2022, including the proposed add-on.

S&P said it revised the recovery rating on the notes to 4 from 3. The 4 recovery rating on the senior notes indicates 30% to 50% expected default recovery.

While the agency said it increased the estimate of Viking’s enterprise value due to the company’s significant planned fleet expansion, the greater amount of secured borrowings used to fund multiple, future longship deliveries and the proposed senior notes add-on result in lower recovery prospects for the senior notes.

The outlook revision reflects an expectation for strong EBITDA growth through 2015, primarily from successful absorption of significant new longship capacity, as well as a belief that a future debt-financed dividend is unlikely over the next few years, S&P said.

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