8-KMaterial AgreementsFinancial EventsExhibits & Filings

ROYAL CARIBBEAN CRUISES LTD 8-K Report, Material Agreement (Jun 18, 2018)

Filed June 18, 2018For Securities:RCL

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.

Frequently Asked Questions

The purpose of establishing a commercial paper program is to provide Royal Caribbean Cruises Ltd. with a flexible and cost-effective way to manage its short-term funding needs. It allows the company to issue short-term debt to meet immediate cash requirements, working capital needs, or to take advantage of favorable market conditions, while having a backstop from its credit facilities for repayment.

The aggregate face or principal amount of commercial paper notes outstanding at any time under this program will not exceed $1,150,000,000 (or $1.15 billion).

The commercial paper notes issued under this program will rank at least pari passu (equally) with all other unsecured and unsubordinated indebtedness of Royal Caribbean. This means the new short-term debt does not have a senior claim over other similar debt, nor is it subordinated.

No, these commercial paper notes have not been and will not be registered under the Securities Act of 1933 or state securities laws. They are being offered and sold under an exemption from registration, specifically Section 4(a)(2) of the Securities Act, which is typically used for private placements to sophisticated investors.