Summary
Royal Caribbean Cruises Ltd. (RCL) announced on June 18, 2018, the establishment of a new commercial paper program. This program allows the company to issue short-term, unsecured commercial paper notes with maturities of up to 397 days, with an aggregate principal amount outstanding not to exceed $1.15 billion. The company intends to use its existing revolving credit facilities as a liquidity backstop for the repayment of these notes. This move is a strategic financial maneuver to enhance liquidity and provide flexibility in managing short-term funding needs. Investors should view this as a standard practice for large corporations to optimize their capital structure and ensure operational readiness, particularly in anticipation of potential short-term cash requirements or market opportunities. The notes are unsecured and unsubordinated, ranking equally with other existing unsecured debt.
Key Highlights
- 1Establishment of a $1.15 billion commercial paper program for short-term unsecured debt issuance.
- 2Notes will have maturities of up to 397 days.
- 3Program is backed by existing revolving credit facilities for liquidity support.
- 4Commercial paper ranks pari passu with other unsecured and unsubordinated indebtedness.
- 5Utilizes an exemption from registration under the Securities Act of 1933.
- 6The filing also includes the form of the Commercial Paper Dealer Agreement as an exhibit.