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Bond Market News
Royal Caribbean Upgraded to Baa2 by Moody’s
February 12, 2026
Royal Caribbean Cruises Ltd. was upgraded by a notch to Baa2 from Baa3 by Moody’s. The upgrade reflects expectations of sustained earnings growth supported by strong cruise demand, effective pricing and disciplined cost control. Although the company plans significant investment in new ships, Moody’s expects leverage to stay manageable, with debt-to-EBITDA below 3.0x in the coming years. The company’s strong business profile and well-known brands should benefit from rising global cruise demand and higher onboard spending, aided by new private beach clubs opening through 2028, Moody’s highlighted. As of end-December 2025, its leverage was about 3.0x and profitability was robust, with an EBITA margin of 36.4%. Operating margins and cash flow are projected to grow alongside fleet expansion. According to Moody’s, Royal Caribbean’s liquidity remains solid, with a projected $700mn cash, $6.6bn operating cash flow in 2026 and ample revolving credit facilities. Risks include cost inflation, cyclical travel demand and pricing pressure in the Caribbean amid capacity growth.
Its dollar bonds traded stable, with its 5.5% 2028s at 102.1, yielding 4.14%.
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