CLARIFICATION: Fitch Downgrades Carnival Corp.'s Sr. Notes.

Business Editors

CHICAGO--(BUSINESS WIRE)--Oct. 5, 2000

In a previously released press release, Carnival Corporation's rating outlook was inadvertently not included. Following is the corrected press release.

Fitch, the international rating agency, has lowered the long-term senior notes rating of Carnival Corporation (CCL) from `A+' to `A' and removed the long-term ratings from Rating Watch Negative, where they were placed on August 30, 2000. Approximately $1.1 billion of debt securities are affected by this rating action. Ratings affirmed included Carnival Corporation's and Carnival (UK) PLC's $1.2 billion commercial paper programs at `F1'. The Rating Outlook is Stable.

The rating actions follow the completion of the acquisition of the 50% interest in Genoa, Italy-based Costa Crociere that CCL previously did not own. The acquisition cost of the equity was 350 million pounds sterling (approximately $510 million U.S. at current exchange rates) as well as the consolidation of more than $600 million of Costa debt (although CCL had previously guaranteed $75 million of this amount).

Fitch views the acquisition favorably from a strategic perspective, as control of Costa will provide CCL with a strong platform to expand its presence in the fast growing European market. However, the lowered long-term rating reflects a resulting material increase in debt levels (from $1.3 billion at May 31, 2000 to more than $2.5 billion on a pro forma basis) and Fitch's concern that the company's capital investment requirements will remain substantial, precluding debt reduction over the next few years. In particular, CCL presently has 16 new ships on order, which represents approximately $6.7 billion of capital investment to be funded over the next four and a half years. This expansion will eventually increase the company's fleet size by 33% in terms of ships while adding roughly 60% of new berth capacity to the portfolio (excluding possible divestitures).

Given the increase in leverage associated with the Costa acquisition, the impact of $705 million in share repurchases, the current softness in net yields as well as the concerns associated with substantial new capacity additions during the next several years, Fitch believes the company's credit profile has weakened, supporting the aforementioned downgrade.

In particular, although new capital investment is expected to be funded in large part with operating cash flow, the company is expected to be a net borrower for each of the next four years, assuming the company maintains its dividend payout ratio at historical levels of 20-25% of net income. Consequently, credit measures are expected to remain at or around the new pro forma levels for the foreseeable term. In particular, debt/EBITDA is expected to remain at or around 1.9 times with EBITDA/interest in the high single digits and balance sheet leverage maintained near 30%.

Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance Markets worldwide.