8-KMaterial AgreementsFinancial EventsExhibits & Filings

ROYAL CARIBBEAN CRUISES LTD 8-K Report, Material Agreement (Nov 28, 2017)

Filed November 28, 2017For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) announced on November 28, 2017, the successful completion of an $800 million offering of senior unsecured notes. This offering was split into two tranches: $300 million of 2.650% notes due in 2020 and $500 million of 3.700% notes due in 2028. The net proceeds from this issuance are approximately $791.9 million, which the company intends to use primarily for debt repayment, including a $290 million term loan and portions of its revolving credit facilities. Any remaining funds will be allocated to general corporate purposes. This debt issuance represents a strategic move by RCL to manage its capital structure, extend its debt maturity profile, and potentially lower its overall interest expense. The relatively low interest rates on these notes, particularly the 2020 tranche, indicate favorable market conditions for the company at the time. Investors should note the use of proceeds, which are focused on deleveraging and operational flexibility. The terms also include provisions for early redemption by the company and a change of control provision that could trigger a repurchase offer.

Key Highlights

  • 1Completed an $800 million offering of senior unsecured notes on November 28, 2017.
  • 2The offering comprised $300 million of 2.650% notes due 2020 and $500 million of 3.700% notes due 2028.
  • 3Net proceeds from the offering were approximately $791.9 million.
  • 4Proceeds are intended for repaying existing debt, including a $290 million term loan and revolving credit facilities.
  • 5The notes are unsecured and unsubordinated, ranking equally with other unsubordinated debt.
  • 6The notes include provisions for early redemption by RCL and a change of control repurchase obligation.

Frequently Asked Questions

The primary purpose of the note offering was to raise capital to repay existing indebtedness, specifically a $290 million unsecured term loan due in 2018 and portions of its unsecured revolving credit facilities due in 2020 and 2022. Any remaining proceeds were designated for general corporate purposes.

The offering included $300 million of notes with a 2.650% interest rate maturing on November 28, 2020, and $500 million of notes with a 3.700% interest rate maturing on March 15, 2028.

No, the notes are senior unsecured and unsubordinated obligations of Royal Caribbean Cruises Ltd. This means they rank equally with all of the company's other unsubordinated debt and are not backed by specific company assets.

In the event of a specified change of control triggering event, Royal Caribbean Cruises Ltd. is obligated to offer to purchase the notes at a redemption price of 101% of their principal amount, plus accrued and unpaid interest, to protect the noteholders.