S&P revises Hurtigruten to negative

Standard & Poor's said it revised its outlook on Silk Bidco AS (Hurtigruten) to negative from stable and affirmed its B long-term corporate credit rating.

At the same time, the agency affirmed its BB issue rating on Hurtigruten's super senior revolving credit facility. The recovery rating is unchanged at 1+, indicating expectations of full (100%) recovery in the event of a default.

S&P also affirmed its B issue rating on senior secured notes. The recovery rating is unchanged at 4, indicating an expectation of recovery prospects in the upper half of the 30%-50% range.

S&P said the outlook revision reflects the risk that the European Free Trade Association's ongoing investigation into the Norwegian government's Coastal Services Agreement with Hurtigruten could have a negative impact on the group's operating performance or cash flows if there were to be any material repercussions stemming from this investigation.

Additionally, the revised outlook incorporates the agency’s view that free operating cash flow could come under pressure in 2016, mainly as a result of higher capital expenditure (capex).

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