8-KMaterial Agreements

ROYAL CARIBBEAN CRUISES LTD 8-K Report, Material Agreement (Jan 26, 2007)

Filed January 26, 2007For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) filed an 8-K on January 26, 2007, to report the execution of a material definitive agreement: an Indenture for the issuance of €1,000,000,000 5.625% Senior Notes due 2014. This significant debt issuance is intended to refinance short-term debt incurred for the acquisition of Pullmantur S.A. and its associated debt, with any remaining proceeds allocated for general corporate purposes. The notes are denominated in euros, with principal and interest payable annually. The Indenture includes provisions for a mandatory repurchase offer to noteholders at 101% of par plus accrued interest in the event of a 'Change of Control Triggering Event' that is accompanied by a specified rating downgrade, as well as remedies for 'Events of Default' and redemption rights related to changes in Liberian tax law.

Key Highlights

  • 1RCL issued €1,000,000,000 of 5.625% Senior Notes due 2014 on January 25, 2007.
  • 2The primary purpose of the note issuance is to refinance debt related to the acquisition of Pullmantur S.A.
  • 3Proceeds will also be used for general corporate purposes.
  • 4The notes are denominated and payable in euros.
  • 5A 'Change of Control Triggering Event' with a specified rating downgrade triggers a mandatory repurchase offer at 101% of principal plus accrued interest.
  • 6The Indenture outlines provisions for Events of Default and trustee actions.
  • 7The notes are subject to redemption in the event of specific changes in Liberian tax law.

Frequently Asked Questions

The primary reason for issuing these €1 billion Senior Notes is to refinance short-term debt that was incurred to finance the recent acquisition of Pullmantur S.A. and repay Pullmantur's existing debt. Remaining funds will support general corporate activities.

The Senior Notes have a principal amount of €1,000,000,000, bear an annual interest rate of 5.625%, and mature in 2014. Payments of principal and interest will be made in euros.

The Indenture includes provisions for a mandatory repurchase offer if a 'Change of Control Triggering Event' occurs, coupled with a specified decline in the notes' credit rating. The trustee also has the right to declare principal and interest immediately due and payable in the event of an 'Event of Default'.

No, the Senior Notes are not registered under the U.S. Securities Act of 1933. They cannot be offered or sold in the United States unless they are registered or qualify for an exemption from registration requirements.