Why is Royal Caribbean reducing its revolving credit facility amount?

While the filing doesn't explicitly state the reason for the reduction, it's common for companies to adjust their credit facilities based on current financial needs, market conditions, and overall debt management strategies. The extension of the maturity date suggests a focus on longer-term financial stability.

What is the total borrowing capacity available to Royal Caribbean after this amendment?

After the amendment, the specific facility is $875 million. However, this is supplemented by another $525 million unsecured revolving credit facility maturing in November 2014, bringing the company's total available borrowing capacity to $1.4 billion.

Are there any new restrictions or requirements imposed on Royal Caribbean by this amended credit facility?

The amended facility retains substantially similar conditions, covenants, representations, warranties, and events of default as the previous agreement. Key financial covenants include maintaining minimum net worth, a specified fixed charge coverage ratio, and limiting the net debt-to-capital ratio.

What is the effective date of this amendment?

The amendment is scheduled to become effective on July 21, 2011.

RCL 8-K: Material Agreements & Financial Events

Summary

Royal Caribbean Cruises Ltd. (RCL) has announced a significant amendment to its unsecured revolving credit facility. Effective July 21, 2011, the total facility amount has been reduced from $1.225 billion to $875 million, with the maturity date extended to July 21, 2016. This adjustment is part of a broader strategy to manage the company's capital structure and debt obligations. Despite the reduction in this specific facility, RCL maintains a total borrowing capacity of $1.4 billion, including another $525 million facility maturing in November 2014.

Key Highlights

1Amendment and restatement of a $1.225 billion unsecured revolving credit facility.
2Reduction of the facility amount to $875 million.
3Extension of the termination date for this facility to July 21, 2016.
4Current interest rate on advances is LIBOR plus a 2.00% margin.
5Total available borrowing capacity remains substantial at $1.4 billion.
6The amended facility includes customary covenants, financial covenants (minimum net worth, fixed charge coverage ratio), and events of default.
7Certain lenders and their affiliates continue to provide banking and financial services to RCL.

ROYAL CARIBBEAN CRUISES LTD 8-K Report, Material Agreement (Jul 19, 2011)

Summary

Key Highlights

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