Shares of the Miami company at last check were down 5.7% to $16.97.
"[The] cruise industry may face an extended period of weak demand that will cause global cruise operator Carnival Corp.'s credit measures to remain very weak through at least 2021 as it implements a phased resumption of its cruises and given incremental debt raises to bolster its liquidity while its operations remain suspended," the credit-rating company said in a statement.
S&P cut the company’s long-term rating by three levels, to BB- from BBB.
In May Moody’s Investors Service lowered the company's debt to junk status. On Tuesday Moody's lowered its senior unsecured debt rating on Carnival one notch to Ba2, the second-highest junk rate.
"The rapid spread of the coronavirus outbreak and deteriorating global economic outlook are creating a severe and extensive credit shock across many sectors, regions and markets," Moody's said.
"The combined credit effects of these developments are unprecedented. The cruise sector has been one of the sectors most significantly affected by the shock, given its sensitivity to consumer demand and sentiment. "
More specifically, Moody's said, "Carnival's exposure to increased travel restrictions has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the continued uncertainty around the potential recovery from the outbreak."
On Monday, Carnival said it was extending its pause of North American cruises through Sept. 30, the third time the company has extended the pause since the original March 13 announcement.
Earlier this month, Carnival posted a massive second-quarter loss and steps to begin selling off a half-dozen of its older cruise ships as its operations remain stalled amid the coronavirus outbreak.
The cruise ship industry has been battered by the coronavirus pandemic and several vessels were hotspots for the disease earlier this year.