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.