Moody's Investors Service raised Royal Caribbean Cruises Ltd.'s (RCCL) speculative grade liquidity rating on Wednesday, citing improved free cash flow and an extension given to an $875 million revolving credit line, Moneywatch said on its website.

"The ratings agency raised the rating to "SGL-2" from "SGL-3," saying that the cruise operator should have good level of financial liquidity over the next year. The Miami company's free cash flow is expected to rise thanks to less spending on new ships. Royal Caribbean does not have a new ship delivery until the fourth quarter, when it will add the Reflection vessel to its fleet. Moody's also based the rating upgrade on an extension until July 16 on its revolving credit line, which was set to expire in June 2012," Moneywatch said.

The ratings agency maintained Royal Caribbean's other ratings and stable outlook, the report noted.