LONDON, Feb. 5 -- Standard & Poor's today lowered its ratings
on the class A and B notes issued by Cruise Ship Finance Ltd. to
triple-'B'-minus from triple-'B' and removed the ratings from CreditWatch with
negative implications, where they had been placed on Jan. 25, 2001.

The rating action reflects Standard & Poor's Jan. 22, 2001 downgrade of
Royal Caribbean Cruises Ltd.'s (RCL) corporate rating to triple-'B'-minus from
triple-'B'. As the underlying obligor on the receivables held by Cruise Ship,
RCL is a supporting rating to the transaction.

In its analysis of the consequences of RCL's downgrade, Standard & Poor's
took into consideration the fact that in a situation where RCL is in default,
Cruise Ship's noteholders have access to the sale proceeds of the ships that
are the object of the receivables on RCL. In addition, because only 85% of the
purchase price paid by RCL for the ships was financed by Cruise Ship, and a
25% residual market value guarantee was provided directly by Alstom Holdings
to Cruise Ship, a special-purpose entity, noteholders benefit from additional
protection against potential market value decline.

Nevertheless, in order for Standard & Poor's to elevate the rating of the
transaction above that of RCL using a market value approach, all of the
following conditions must be met concurrently:
-- The financed ships must be able to be sold at a discount of less than
36.5%, whenever RCL is assumed to default.
-- The sale process must be completed within six months of the default
(so that the legal maturity of the bonds is respected).
-- From a structural standpoint, the transaction documentation must be
unequivocal as to what entity undertakes the sale process and how the
sale proceeds are used to redeem Cruise Ship's debt.

Standard & Poor's view is that these conditions are not all met with a
sufficient degree of certainty.

Numerous characteristics of the cruise ship industry underpin this decision.
These include the relatively small number of players active in the industry
and their respective credit quality; the important level of ship orders
already made by existing cruise companies to increase available capacity in
the coming years; the relatively long chartering and marketing process
characteristic of the industry; and the fact that any cruise liner is made to
the purchaser's specifications and that its unique features can be widely
undervalued in a second sale. Additional factors underlying the decision
include the concentration of risk on only one or at most two ships and some
uncertainty as to how the sale process would be completed, in light of the
transaction's documentation, Standard & Poor's said. -- CreditWire