8-KMaterial AgreementsExhibits & Filings

ROYAL CARIBBEAN CRUISES LTD 8-K Report, Material Agreement (May 13, 2009)

Filed May 13, 2009For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) has filed an 8-K report detailing a significant financing agreement for its new ship, 'Oasis of the Seas'. On May 7, 2009, the company, acting as guarantor, and its wholly-owned subsidiary Oasis of the Seas Inc. (the borrower) entered into a credit agreement with various financial institutions and BNP Paribas as Administrative Agent. This agreement provides for an unsecured term loan of up to $1.05 billion, to be used towards the purchase price of the 'Oasis of the Seas'. The financing involves contributions from Finnish Export Credit Ltd (approximately 40%) and other financial institutions (approximately 60%), with a substantial 95% guarantee from Finnvera, Finland's export credit agency. This structure provides considerable support and reduces direct credit risk for RCL.

Key Highlights

  • 1Entered into a credit agreement for up to $1.05 billion for the 'Oasis of the Seas'.
  • 2Loan is unsecured and provided to a wholly-owned subsidiary, Oasis of the Seas Inc., with RCL as guarantor.
  • 3Financing includes contributions from Finnish Export Credit Ltd (approx. 40%) and other financial institutions (approx. 60%).
  • 4Loan is 95% guaranteed by Finnvera, Finland's official export credit agency, mitigating risk for the borrower.
  • 5The loan amortizes over 12 years with semi-annual payments, offering a long repayment period.
  • 6A portion of the loan will have a fixed interest rate of approximately 5.41%, with the remainder at a floating rate (LIBOR/EURIBOR plus margin).
  • 7Borrower has the option for voluntary prepayments and financial institutions can elect repayment in the sixth year.

Frequently Asked Questions

The loan proceeds are intended to fund the purchase price of the company's new cruise ship, the 'Oasis of the Seas'.

The financing is a blend of funds from Finnish Export Credit Ltd (approximately 40%) and other financial institutions (approximately 60%). BNP Paribas is serving as the Administrative Agent.

The loan is guaranteed by Finnvera, the official export credit agency of Finland, for 95% of its amount. This significantly de-risks the loan for the lenders and, by extension, for Royal Caribbean Cruises Ltd. (RCL) as the guarantor.

The loan is structured with semi-annual payments over a 12-year amortization period. Additionally, each financial institution involved has the option to elect repayment of their portion of the loan on the sixth anniversary of the agreement.