Summary
Royal Caribbean Cruises Ltd. (RCL) announced a significant amendment and restatement of its unsecured revolving credit facility on August 26, 2013. The key change is an increase in the facility's total amount from $525 million to $850 million, with the termination date extended to August 23, 2018. This bolstered facility, along with an existing $1.1 billion facility, brings RCL's total revolving credit capacity to $2.0 billion, providing substantial financial flexibility. The amendment also includes provisions for a potential further increase of up to $300 million in the facility's capacity, subject to lender commitments. While interest rates and fees are detailed (LIBOR plus 1.75% margin and a 0.37% facility fee), the core financial covenants remain largely consistent, requiring the maintenance of minimum net worth, a fixed charge coverage ratio, and limits on the net debt-to-capital ratio. This move indicates RCL's proactive management of its liquidity and financing structure.
Key Highlights
- 1RCL amended and restated its unsecured revolving credit facility, increasing its size to $850 million from $525 million.
- 2The facility's termination date has been extended to August 23, 2018.
- 3Total revolving credit capacity for RCL now stands at $2.0 billion, combining the amended facility with an existing $1.1 billion facility.
- 4The company retains the option to further increase the facility's capacity by an additional $300 million.
- 5Interest on advances under the amended facility is set at LIBOR plus a 1.75% margin.
- 6A facility fee of 0.37% per annum on total commitments is applicable.
- 7Key financial covenants, including minimum net worth, fixed charge coverage ratio, and net debt-to-capital ratio limits, remain substantially similar to the previous agreement.