S&P assigns BB- to Silversea Cruise notes

S&P said it assigned its B corporate credit rating to Silversea Cruise Holding Ltd. The outlook is stable.

At the same time, S&P assigned a BB- issue-level and 1 recovery rating to Silversea's proposed $275 million senior secured notes due in 2025. The 1 recovery rating reflects an expectation for very high recovery (90%-100%) for lenders in a payment default.

The notes, in conjunction with a $40 million priority revolving credit facility (not rated), are being issued by Silversea's direct subsidiary Silversea Cruise Finance Ltd. Silversea expects to use proceeds to refinance certain debt, to prefund capital expenditures, for general corporate purposes and for transaction fees and expenses.

S&P said the B rating reflects our forecast for high adjusted leverage, in the mid-6x area, in 2017, improving to around 5x in 2018. The rating also reflects Silversea's limited scale and lack of brand diversity compared to larger cruise operators and other globally diversified leisure credits.

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