Summary
Royal Caribbean Cruises Ltd. (RCL) has filed an 8-K report detailing significant amendments to its credit facilities. These amendments primarily focus on extending the waiver of critical financial covenants, specifically the fixed charge coverage and net debt to capitalization ratios, through the third quarter of 2022. This extension provides the company with continued flexibility during a challenging operating environment. Additionally, the terms for testing these covenants have been modified for the period following the waiver, and the minimum liquidity requirement has been increased to $500 million during the waiver period. The company also amended its export credit-backed facilities related to its Icon-class ships, including those guaranteed by Finnvera. These amendments formalize the issuance of previously agreed-upon guarantees and complete the company's obligations under its Financial Covenant Extension Amendments. These actions collectively demonstrate RCL's efforts to manage its debt obligations and maintain financial stability while navigating the ongoing impact of the pandemic on the cruise industry.
Key Highlights
- 1Amendments extend waiver of fixed charge coverage and net debt to capitalization covenants through Q3 2022.
- 2Modified covenant calculation methods and levels for post-waiver period through end of 2023.
- 3Increased minimum liquidity covenant to $500 million during the waiver period.
- 4Restrictions on cash dividends and share repurchases extended through Q3 2022.
- 5Amended export credit-backed facilities for Icon-class ships, including Finnvera guarantees.
- 6Formalized issuance of subsidiary guarantees for export credit facilities, satisfying prior obligations.
- 7Completed all Financial Covenant Extension Amendments as previously disclosed.