Summary
Royal Caribbean Cruises Ltd. (RCL) announced on November 19, 2015, the execution of credit agreements for the financing of its fourth and fifth Quantum-class ships. These vessels are slated for delivery in the second quarter of 2019 and the fourth quarter of 2020, respectively. The financing involves unsecured, U.S. dollar-denominated term loans, with each loan guaranteed at 95% by Euler Hermes Deutschland AG, Germany's official export credit agency. This structure suggests a favorable financing arrangement, leveraging German export credit support for new vessel construction. The agreements provide for loans covering up to 80% of the vessel purchase price plus 100% of the premium payable to Hermes. The loans will amortize semi-annually and mature twelve years after delivery. RCL has the option to choose between a fixed interest rate of 3.45% or a floating rate based on LIBOR plus 0.95%. The company has secured significant, long-term financing for its future fleet expansion, which is a positive development for its growth strategy and financial planning.
Key Highlights
- 1RCL entered into material definitive agreements on November 13, 2015, for financing two new Quantum-class ships.
- 2The financing is for vessels scheduled for delivery in Q2 2019 and Q4 2020.
- 3Each credit agreement provides for an unsecured, U.S. dollar-denominated term loan.
- 4The loans are guaranteed at 95% by Euler Hermes Deutschland AG, the German export credit agency.
- 5Financing covers up to 80% of the vessel purchase price plus 100% of the Hermes premium.
- 6Loans will have a maturity of twelve years post-delivery and amortize semi-annually.
- 7RCL has a choice between a fixed interest rate of 3.45% or a floating rate of LIBOR + 0.95%.