Summary
Royal Caribbean Cruises Ltd. (RCL) announced a material definitive agreement through a 364-day unsecured term loan facility, dated June 29, 2018. This facility, with a maximum principal amount of $700 million, is primarily intended to finance a portion of the acquisition of 66.67% of Silversea Cruise Holding Ltd. and cover associated costs. The loan agreement includes variable interest rates based on LIBOR or a base rate, plus applicable margins, and a ticking fee on undrawn commitments. It also contains customary covenants and events of default similar to RCL's existing credit facilities, including financial covenants related to fixed charge coverage and net debt-to-capital ratios. The funding of the term loan became effective on July 2, 2018, with advances maturing 364 days thereafter. A key condition for repayment includes an immediate mandatory prepayment if the Silversea acquisition is not consummated within 10 business days of funding.
Key Highlights
- 1RCL secured a $700 million, 364-day unsecured term loan facility.
- 2The loan proceeds will finance a portion of the Silversea Cruise Holding Ltd. acquisition and related expenses.
- 3The interest rate on the loan is variable, based on LIBOR or a base rate plus a margin, and is dependent on RCL's senior debt rating.
- 4A ticking fee will be charged on undrawn commitments, ranging from 0.08% to 0.20% annually.
- 5The loan agreement includes financial covenants, such as maintaining a fixed charge coverage ratio and limiting the net debt-to-capital ratio.
- 6A mandatory prepayment of the loan is required if the Silversea acquisition is not completed within 10 business days of the loan funding.
- 7The funding for the term loan became effective on July 2, 2018.