S&P keeps TUI on watch

Standard & Poor's said it kept TUI AG's BB- long-term corporate credit rating on CreditWatch with negative implications, where they were placed on March 19.

This follows the proposed sale of TUI's container shipping unit Hapag-Lloyd AG on Oct. 13.

S&P said the sale will reduce TUI's capital intensity but that the group's overall business risk profile will weaken as a result of greater reliance on its cyclical and relatively low-margin tourism businesses.

These units are strongly exposed to headwinds from economic weakness in TUI's major markets as well as event risk, the agency said.

The scale and diversity of TUI's tourism operations only partially mitigate these risk factors, the agency noted.

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