S&P rates Viking notes B-, CCC

S&P said it assigned Viking Cruises Ltd. planned $350 million of senior unsecured notes due 2029 to add cash to its balance sheet a CCC rating with a 5 recovery rating. The 5 recovery rating indicates an expectation for substantial recovery (70%-90%; rounded estimate: 85%) in default.

The agency also assigned a B- rating with a 2 recovery rating to subsidiary Viking Ocean Cruises Ship VII Ltd.’s proposed $350 million of senior secured notes due 2029 to finance the Viking Venus purchase. The 2 recovery rating indicates an expectation for modest recovery (10%-30%; rounded estimate: 15%) in default.

The pandemic has severely damaged Viking’s business despite having taken numerous actions to strengthen its liquidity. S&P said it believes Viking will take longer to recover than it had previously forecasted. As a result, it downgraded Viking’s issuer rating to CCC+ from B-, its unsecured debt to CCC from B- with a revised recovery rate to 5 from 4 due to the downgrade and the addition of added unsecured claims.

Finally, S&P said it trimmed Viking’s secured debt by a notch to reflect the downgrade.

The outlook is negative.

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