Summary
Royal Caribbean Cruises Ltd. (RCL) announced on May 4, 2020, that it has entered into material definitive agreements to amend existing export-credit backed loan facilities. These amendments, effective in late April 2020, incorporate a 12-month debt holiday initiative provided by BpiFrance Assurance Export (BpiFAE), France's official export credit agency. This initiative is designed to offer interim relief on debt service and financial covenants to cruise lines during the ongoing global health crisis. The amendments allow RCL to defer principal amortization payments for specific vessels (Celebrity Edge, Celebrity Apex, and Symphony of the Seas) for a period of 12 months, from April 1, 2020, to March 31, 2021. The deferred principal will be repaid in installments starting from April 2021 through October 2024 or March 2025, depending on the vessel. Importantly, these amendments will generate approximately $220 million in incremental liquidity through April 2021, providing crucial financial flexibility during a challenging period for the industry. The agreement also offers relief from mandatory prepayments triggered by breaches of financial covenants during this deferral period.
Key Highlights
- 1RCL amended export-credit backed loan facilities for Celebrity Edge, Celebrity Apex, and Symphony of the Seas.
- 2Amendments incorporate a 12-month debt holiday initiative from BpiFAE, France's export credit agency.
- 3This initiative provides relief on debt service and financial covenants during the global health crisis.
- 4Principal amortization payments due between April 1, 2020, and March 31, 2021, are deferred.
- 5Deferred principal payments will be repaid in semi-annual installments from April 2021 through October 2024/March 2025.
- 6The amendments are expected to generate approximately $220 million in incremental liquidity through April 2021.
- 7Breaches of financial covenants during the deferral period will not trigger mandatory prepayments.