LONDON (Standard & Poor's) Dec. 17, 2010--Standard & Poor's Ratings Services
said today that it revised its outlook on Germany-based tourism and shipping
conglomerate TUI AG to stable from negative. At the same time, the 'B-'
long-term corporate credit rating, along with the 'B-' senior unsecured debt
and 'CCC-' junior subordinated debt ratings, on TUI were affirmed. The
recovery rating of '4' on the senior unsecured debt, and '6' on the junior
subordinated debt, are unchanged.
"The outlook revision reflects our view that improved conditions in the HL
shipping business and recent financing measures by TUI AG and its subsidiaries
and associates, including shareholder loan repayments by both HL and tourism
subsidiary TUI Travel PLC (TTP), have improved TUI's near-term liquidity
position," said Standard & Poor's credit analyst Philip Temme.....
......The ratings on TUI reflect our view of its holding company status, highly
leveraged financial risk profile, short-term debt maturities, reliance on
ongoing refinancing and asset streamlining measures, ongoing significant
exposure to noncore shipping associate HL, and complex structure and cash flow
leakage to minorities. They also reflect the seasonality and cyclicality of
tourism, which faces ongoing margin pressures, threats to discretionary
consumer spending in some markets, and high event risks. Business risks are
mitigated in part by TUI's market-leading position in European tourism, by
geographically well-diversified sales, and by the recovery in shipping.
In our view, recent positive financing momentum and improved performance at HL
strengthen TUI's ability to fund its near-term liabilities. However, liquidity
remains less than adequate over the medium term. In our opinion, TUI is
dependent on the pace of loan repayments from HL (or other measures to extract
capital invested in HL), as well as on asset-streamlining measures.
TUI remains highly leveraged and so susceptible to unexpected operating
shocks. The current rating and outlook assume the group remains committed to
deleveraging and that it will maintain strong discipline over dividends,
capital spending, and mergers and acquisitions. A successful flotation of HL
in 2011, if combined with a partial sale of TUI's stake, could provide rating
upside if proceeds are primarily devoted to deleveraging. We are unlikely to
raise the ratings until medium-term funding is assured and the group brings
lease-adjusted net debt to EBITDA sustainably below 6.0x. Ratings could be
lowered in the event of liquidity-related stress.
London, 14 January 2011 -- Moody's Investors Service has today raised the Corporate Family Rating (CFR) and Probability of Default Rating (PDR) of TUI AG to B3 from Caa1; the unsecured rating and the subordinated ratings are also raised to Caa1 and Caa2, respectively. The outlook is stable.
RATINGS RATIONALE
The rating action reflects Moody's view that the incremental proceeds that have been received from Hapag-Lloyd following its refinancing have improved the financial profile of TUI AG. This includes mainly the repayment of a bridge loan and a hybrid loan in November 2010, which have largely been used to pay down debt at TUI AG in the fourth quarter of 2010. Moody's also notes the significant turnaround in earnings at Hapag-Lloyd in FY2010, and the removal on its restriction to repay loans to TUI AG, which should facilitate the repayment of its obligations to TUI AG. Metrics at TUI AG have also benefited somewhat from the improved underlying earnings in the tourism business in FY2010 in spite of reduced revenues, mainly on account of synergies and cost savings. Finally, Moody's notes the company's announcement in December 2010 that, together with its joint venture partner Albert Ballin, it has mandated certain investment banks for a potential public listing of Hapag-Lloyd.
Moody's has previously indicated that the ability to further monetize TUI AG's financial exposure to Hapag-Lloyd (c.EUR2.1 billion as of December 2010) would be beneficial for both its liquidity and credit metrics, although we recognize that the impact on metrics could be mitigated depending on how the funds are utilised. At this point, TUI AG's liquidity profile at the holding company level is expected to be sufficient beyond a 12-month period, taking into account an expected cash balance of over EUR1 billion as of December 2010, and the expected cash inflows and outflows over the medium term.
The stable outlook reflects our view that the improved performance at TUI Travel, the current B1 CFR of Albert Ballin, the holding company for Hapag-Lloyd, and the stronger liquidity and metrics, position the CFR adequately at B3. While further deleveraging and prospective repayments from Hapag-Lloyd, as well as its planned IPO, could result in further upward pressure on TUI AG's CFR, its high leverage remains a constraint to the ratings at this time.
Upward pressure on the rating could result from the further monetization of TUI's assets in Hapag-Lloyd if the proceeds were used for deleveraging of alternatively if gross leverage at TUI AG as adjusted by Moody's were to fall towards 6 times from its current level of over 7 times on a pro forma basis for debts repaid in December 2010. The rating could be negatively impacted if there were a deterioration either in the performance of TUI Travel PLC, or at Hapag-Lloyd, which would impede its ability to repay its obligations to TUI AG.
The last rating action for TUI AG was implemented on 27 September 2010, when the Corporate Family Rating was affirmed at Caa1 and the outlook was changed to stable from negative.
TUI AG's ratings were assigned by evaluating factors we believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of TUI AG's core industry and TUI AG's ratings are believed to be comparable to those of other issuers of similar credit risk.
TUI, headquartered in Hanover, Germany, is Europe's largest integrated tourism group, and currently retains a 49.8% stake in Hapag-Lloyd, which is a leading provider of container shipping services. In FY2010 (to September), the group reported revenues and underlying EBITA from continuing operations of EUR16.35 billion and EUR589 million, respectively.
In ultimo Lucror
Tui orders cruise ship, sees strong demand
“Hold” senior bonds; “Neutral” on its hybrid TUIGR 8.625% trading at c. 75 and yielding 35% to its first call; “Sell” 1Y CDS at 750 bps (however, rather illiquid and hold to maturity)
Tui Cruises, a JV between Tui (holding a 50% stake) and Royal Caribbean Cruises, signed a contract with Finnish shipyard STX for the delivery of a new cruise ship in 2014. Further, Tui Cruises may exercise an option for a second ship within the next 12 months, subject to the supervisory board’s approval. While no details about the purchase price or the respective financing were released (we expect lease financing), the new 97,000 gross registered tons ship will be approximately 295 meters long and span across 15 decks. We estimate a total cost of c. EUR 300-500 mn, depending on the particular features of the ship. Tui Cruises currently operates two cruise ships (subsidiary Hapag-Lloyd Kreuzfahrten operates four cruise ships). The announcement should not come as a surprise and is in line with Tui’s strategy to expand its cruise segment. However, the segment is highly cyclical and capital intensive and results have been mixed in our view. We believe short term CDS is attractive (albeit slightly illiquid and hold to maturity) and keep our “High Risk” assessment on the LARA scale.
Insomma come dicono loro High Risk, ma un cip ci può stare
e non vedremo cedola al 26/10, vorremmo capirci qualcosa di più.
prossimamente ti posterò il portafoglietto che ho preparato con tanto di dati delle società e tutto