It hasn't been smooth sailing for cruise ship transactions recently. Following the downgrade of Royal Caribbean Cruises Ltd. (RCCL) to double-B-plus from triple-B-minus, S&P and Moody's placed both the Cruise Ship Finance transactions' triple-B-minus ratings on watch negative.

Despite an earlier action taken by S&P to remove both the Cruise Ship Finance I & II from negative watch in late September, last week Moody's downgraded the 324 million tranche of Cruise Ship Finance II to Baa3 from Baa2. It's a move that comes as little surprise as market analysts protested the earlier S&P action based on reservations regarding the length of time still left on the deal.

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