Summary
This 8-K filing from Royal Caribbean Cruises Ltd. (RCL) on March 19, 2010, announces a significant financing agreement. The company, through its wholly-owned subsidiary Allure of the Seas Inc., has entered into a credit agreement for an unsecured term loan facility of up to $1.13 billion. This loan is primarily intended to finance the purchase price of the cruise ship 'Allure of the Seas'. Notably, the loan is 95% guaranteed by Finnvera, Finland's export credit agency, mitigating a substantial portion of the credit risk. The loan features a 12-year amortization schedule with semi-annual payments and a seven-year repayment option for participating financial institutions. This move provides crucial funding for a major capital expenditure, underscoring the company's strategic investment in its fleet expansion.
Key Highlights
- 1RCL subsidiary Allure of the Seas Inc. secured a credit agreement for up to $1.13 billion.
- 2The unsecured term loan is designated for the purchase of the cruise ship 'Allure of the Seas'.
- 3Finnvera, Finland's export credit agency, provides a 95% guarantee on the loan, significantly de-risking the facility.
- 4The loan has a 12-year amortization period with semi-annual principal payments.
- 5Financial institutions participating in the loan have an option to elect repayment on the seventh anniversary.
- 6The borrower, Allure of the Seas Inc., has the flexibility to make voluntary prepayments of the principal.
- 7This financing supports a major capital investment in the company's fleet expansion.