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.