Moody's rates Sea Containers

Moody's Investors Service said it has assigned a prospective B3 rating to Sea Containers Ltd.'s proposed $150 million senior unsecured notes due 2014 and a prospective B2 rating to Sea Containers' proposed $120 million senior secured revolving credit facility due 2006.

Proceeds from the proposed notes offering will be used to repay about $146 million of revolving credit borrowings outstanding that are currently secured by a substantial portion of the company's container fleet and shares in Orient Express Hotels Ltd.

Proceeds from the proposed revolving credit facility, which will replace the existing container-secured facility due 2004, will be used to call about $80 million of senior subordinated notes due November 2004 (callable in May 2004) at par.

Moody's said that upon completion of the proposed transactions and repayment of existing debt as contemplated, the company's overall financial profile will be strengthened, which could be beneficial to the company's outlook, which is negative.

Moody's said the ratings continue to reflect the company's high debt levels, relatively thin operating margins and cash flow generation, and uncertainties surrounding the future of the company's U.K. rail franchise.

Ratings are supported by the company's fixed asset base, its position in certain protected markets, improving financial performance in its passenger sector and container operations, as well as liquidity available through holdings in shares of Orient Express Hotels.

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