Summary
Royal Caribbean Cruises Ltd. (RCL) announced on June 28, 2016, the entry into material definitive agreements for the financing of two new Edge-class ships for its Celebrity Cruises brand. These vessels are slated for delivery in the fall of 2018 and the first half of 2020, respectively. The financing is structured as U.S. dollar-denominated term loans, with each loan guaranteed 100% by COFACE, the official export credit agency of France. These agreements provide significant financial flexibility for RCL, covering up to 80% of the vessel purchase price plus associated COFACE premiums. The loans will amortize semi-annually and mature twelve years after delivery, carrying a fixed interest rate of 3.225%. This move signals RCL's commitment to fleet expansion and modernization, providing clarity on the funding for these major capital expenditures.
Key Highlights
- 1RCL entered into credit agreements to finance two new Edge-class ships for Celebrity Cruises, with delivery expected in Fall 2018 and H1 2020.
- 2The financing for each ship is structured as a U.S. dollar-denominated term loan.
- 3Each loan is 100% guaranteed by Compagnie Française D’Assurance pour le Commerce Extérieur (COFACE), the French export credit agency.
- 4The maximum loan amount for each facility covers 80% of the vessel purchase price plus 100% of the COFACE premium.
- 5Loans will amortize semi-annually and mature twelve years after delivery.
- 6A fixed interest rate of 3.225% (inclusive of margin) has been secured for these loans.
- 7The credit agreements include customary default and prepayment provisions.