You are using an outdated browser. Please upgrade your browser to improve your experience.

Our views 12 June 2020

Carnival Corporation – an unimaginable event with imaginable consequences

By Martin Foden, Head of Credit Research

5 min read

The COVID crisis has delivered countless twists and turns in financial markets, yet the grounding of Carnival Cruises was particularly striking. So dramatic was the damage to the company’s balance sheet that the event should become an essential case study for every credit analyst.

In this article we outline the insights RLAM’s credit research framework provided and, more broadly, what these extraordinary events continue to tell us about the cornerstones of effective credit analysis?

The word ‘discipline’ gets thrown about so much in investment markets that it often feels like a meaningless platitude that adds little to the conversation. After all, who wouldn’t think that discipline is important when investing? The problem is that during periods where the credit waters are calm and tranquil, the principle can seem highly theoretical. You can go a long time in credit when nothing notably bad happens, and it can become tempting to build your investment thesis on a benign status quo.

Read Carnival Corporation full article