Summary
On April 15, 2014, Royal Caribbean Cruises Ltd. (RCL) announced the entry into a new US dollar financing agreement, the "Dollar Facility Agreement," to fund a portion of its third Oasis-class ship. This unsecured term loan provides up to approximately €178 million (US dollar equivalent). Concurrently, the company amended its existing Euro-denominated credit facility, originally for €892 million, to reduce the maximum amount to approximately €714 million. Both facilities are fully guaranteed by the French export credit agency, COFACE. The new US dollar facility is set to amortize semi-annually and will mature twelve years after the ship's scheduled delivery in the second quarter of 2016. RCL has the option to choose between a fixed interest rate of 2.53% or a floating rate of LIBOR plus 1.20% prior to the ship's delivery. The agreement includes standard clauses for default and prepayment, such as non-payment, covenant breaches, and changes of control.
Key Highlights
- 1RCL entered into a new US dollar credit facility for €178 million (approx.) to finance its third Oasis-class ship.
- 2The company amended its existing Euro credit facility, reducing its maximum amount from €892 million to €714 million.
- 3Both the new US dollar and the amended Euro facilities are 100% guaranteed by COFACE, the French export credit agency.
- 4The new US dollar facility is an unsecured term loan with a maturity of 12 years post-ship delivery (Q2 2016).
- 5Borrowers can elect a fixed interest rate of 2.53% or a floating rate of LIBOR + 1.20% before ship delivery.
- 6The agreements contain customary events of default and prepayment provisions.