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Bond Market News
Royal Caribbean Upgraded to BBB by S&P
February 3, 2026
Royal Caribbean Cruises was upgraded to BBB from BBB- by S&P. This follows strong forward bookings for 2026, with approximately two-thirds of capacity already sold at higher prices, providing significant revenue visibility. S&P expects Royal Caribbean’s credit metrics to improve substantially this year — Adjusted Leverage is projected to reach 2.6x, below the 3x upgrade threshold; EBITDA Interest Coverage is set to reach 7x, surpassing the 6x threshold. The company’s updated financial policy aims to sustain leverage below 3x vs. from its pre-pandemic target of 3.5x. S&P noted that the cruise company’s current metrics provide a sufficient cushion to withstand a moderate to severe cyclical downturn. Despite a capital-intensive ship delivery schedule and a new $2bn share buyback program, the company’s large cash flow base is expected to fund investments in new ships and private destinations while continuing to reduce debt.
Royal Caribbean’s dollar bonds were trading with a positive bias with its 5.5% 2028s at 102.1, yielding 4.2%.
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