(The following statement was released by the rating agency)
Nov 23 -
-- Germany-based tour operator TUI AG has improved its financial
performance beyond our previous expectations.
-- We anticipate the company will reach adjusted debt leverage of below
6x for fiscal 2012 and further gradually reduce debt leverage over the next 12
-- We are revising our outlook on TUI to positive from stable and
affirming our 'B-' rating.
-- The positive outlook reflects our expectation that TUI will improve
its financial metrics for fiscal year 2012 and beyond.
On Nov. 23, 2012, Standard & Poor's Ratings Services revised its outlook on
Germany-based tour operator TUI AG to positive from stable. At the same time,
we affirmed our 'B-' long-term corporate credit rating on the company. We also
affirmed our ratings on all of TUI's rated debt issues.
Our outlook revision reflects the expected improvement in TUI's financial
credit ratios due to its good operating performance and focus on debt
reduction, which we expect will continue in the future. We also believe the
company should be able to achieve adjusted debt to EBITDA of less than 6x for
the fiscal year ended Sept. 30, 2012, and further reduce adjusted debt
leverage during fiscal 2013.
Following an expected strong fourth quarter and successful cost cutting at TUI
Travel, together with significantly lower debt leverage at the holding company
after the partial disposal of Hapag-Lloyd in the first half of 2012, we
believe TUI should be able to achieve adjusted debt to EBITDA of just under 6x
and adjusted EBITDA interest cover of about 2.5x. We consider these ratios
commensurate with a 'B' rating.