Summary
This 8-K filing from Royal Caribbean Cruises Ltd. (RCL) on December 23, 2008, announces a material definitive agreement entered into on December 19, 2008. A subsidiary, Celebrity Solstice V Inc., secured a Credit Agreement with KfW IPEX-Bank GmbH for an unsecured term loan up to the USD equivalent of EUR 485.6 million. The proceeds are earmarked for the purchase of the new ship, 'Celebrity Solstice V,' slated for delivery in 2012. The loan is guaranteed by the parent company, Royal Caribbean Cruises Ltd., will be funded upon ship delivery, and features a 12-year tenor with semi-annual amortization.
Key Highlights
- 1RCL subsidiary, Celebrity Solstice V Inc., entered into a Credit Agreement on December 19, 2008.
- 2The agreement provides for an unsecured term loan of up to EUR 485.6 million (USD equivalent).
- 3Loan proceeds will be used for the purchase of the new ship 'Celebrity Solstice V,' expected in 2012.
- 4The parent company, Royal Caribbean Cruises Ltd., will guarantee the loan.
- 5The loan will be funded upon the delivery of the ship.
- 6The loan has a 12-year tenor with semi-annual amortization.
- 7The loan carries a fixed interest rate of 4.13% (inclusive of margin), with an option to convert to floating rate LIBOR plus margin under certain conditions.
Frequently Asked Questions
The primary purpose of this filing is to announce that Royal Caribbean Cruises Ltd. (RCL), through its subsidiary Celebrity Solstice V Inc., has entered into a material definitive agreement for a significant loan to finance the purchase of a new cruise ship.
The loan is for an amount not exceeding the US Dollar equivalent of EUR 485.6 million. The funds are intended to finance the purchase of a new ship named 'Celebrity Solstice V,' which is scheduled for delivery in 2012.
The loan is unsecured, will be guaranteed by the parent company (RCL), funded upon ship delivery, has a 12-year term with semi-annual payments, and features a fixed interest rate of 4.13%.
Given the economic climate of late 2008, securing financing for a new vessel delivery in 2012 at a fixed, relatively low interest rate demonstrates the company's ability to access capital and plan for future fleet expansion, albeit with a significant financial commitment.