8-KMaterial AgreementsExhibits & Filings

ROYAL CARIBBEAN CRUISES LTD 8-K Report, Material Agreement (Aug 11, 2008)

Filed August 11, 2008For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) announced on August 7, 2008, through a Form 8-K filing, the execution of a material definitive agreement. A subsidiary, Celebrity Solstice Inc., entered into a Credit Agreement for an unsecured term loan of up to the US Dollar equivalent of Euro 412 million, maturing through 2020. This loan will be guaranteed by the parent company and is intended to finance the purchase of the new vessel, Celebrity Solstice. This financing is significant as it provides a substantial amount of capital for a key asset acquisition, contributing to the company's fleet expansion. Investors should note the loan's terms, including its unsecured nature, floating or fixed interest rate options (based on LIBOR plus a margin), and the maturity date. The involvement of KfW IPEX-Bank and BNP Paribas indicates strong banking relationships for securing such large-scale project financing.

Key Highlights

  • 1RCL subsidiary Celebrity Solstice Inc. secured a Euro 412 million unsecured term loan.
  • 2The loan is due through 2020 and will be guaranteed by Royal Caribbean Cruises Ltd.
  • 3Proceeds are designated for the purchase of the new vessel, Celebrity Solstice.
  • 4The loan features flexible interest rate options: floating (LIBOR + margin) or a fixed rate.
  • 5Key financial institutions involved are KfW IPEX-Bank GmbH and BNP Paribas S.A.
  • 6The agreement was finalized on August 7, 2008.

Frequently Asked Questions

The primary purpose of the Credit Agreement is to provide financing for the purchase of Royal Caribbean Cruises Ltd.'s new vessel, Celebrity Solstice. The loan proceeds will be used by the subsidiary, Celebrity Solstice Inc., to acquire this asset.

The loan is for an amount not exceeding the US Dollar equivalent of Euro 412 million. It is an unsecured term loan that matures through 2020. Interest rates can be a floating rate (LIBOR plus applicable margin) or a fixed rate, at the Company's election.

The lenders are KfW IPEX-Bank GmbH (acting as agent and administrative agent) and BNP Paribas S.A. KfW IPEX-Bank is also acting as agent for Euler Hermes Kreditversicherungs AG.

An unsecured loan means that the loan is not backed by specific collateral. This can sometimes imply a higher level of trust from the lenders in the borrower's creditworthiness or might be structured with specific covenants and guarantees to mitigate risk, as is the case with the Company's guarantee here.