S&P: TUI unaffected

Standard & Poor's said the corporate credit rating on TUI AG (BB-/negative) is unaffected by the launch of a €450 million equity-linked financing, backed by the sale of part of TUI AG's shareholding in its largest subsidiary TUI Travel plc.

For a TUI bond investor, this translates into weaker protection as potential debt at TUI Travel could worsen structural subordination, S&P said. Economically, however, the deal could improve TUI's financial flexibility, as funding at the TUI Travel level could translate into a partial repayment of the €2 billion shareholder loan granted by TUI, the agency said.

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