8-KMaterial AgreementsExhibits & Filings

ROYAL CARIBBEAN CRUISES LTD 8-K Report, Material Agreement (Apr 1, 2021)

Filed April 1, 2021For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) has filed an 8-K report detailing significant amendments to its credit facilities. These amendments are primarily aimed at providing the company with greater financial flexibility and extending its runway during a period of industry recovery. Specifically, the company has amended export credit agreements for Silversea Cruises' Evolution-class vessels, pushing back the effective date of financial covenant breaches until the end of Q4 2022, alongside implementing a minimum liquidity covenant. Additionally, RCL has renegotiated its unsecured revolving credit facility with Nordea Bank and a term loan with Bank of America, extending maturity dates by 18 months for consenting lenders and adjusting interest rates and fees. These actions demonstrate RCL's proactive approach to managing its debt obligations and securing necessary financing amidst the ongoing challenges in the cruise industry.

Key Highlights

  • 1Export Credit Facility Amendments for Silversea Cruises extend the period before financial covenant breaches trigger mandatory prepayments or defaults through Q4 2022.
  • 2A minimum liquidity covenant has been introduced for the Silversea Cruises export credit facilities, aligning with other company credit agreements.
  • 3Certain actions, such as dividend issuance, share repurchases, and non-crisis debt issuance, are restricted during the waiver period under the Silversea facilities.
  • 4The $1.55 billion unsecured revolving credit facility with Nordea Bank has been amended, extending maturity dates by 18 months for consenting lenders.
  • 5The $1.0 billion unsecured term loan with Bank of America has also been amended, with extended maturity dates by 18 months for consenting lenders.
  • 6The Nordea Revolver's aggregate revolving capacity has been adjusted, with portions now maturing in April 2024.
  • 7The BofA Term Loan's aggregate principal balance has been adjusted, with portions now maturing in April 2022 and October 2023.

Frequently Asked Questions

The main purpose of these amendments is to provide Royal Caribbean Cruises Ltd. with increased financial flexibility and extend the maturity of key credit facilities. This is crucial for navigating the ongoing impact of the pandemic on the cruise industry and ensuring sufficient liquidity and operational runway.

The amendments to the export credit facilities for Silversea Cruises include restrictions on certain actions during the waiver period, subject to carveouts. These restrictions include the issuance of dividends and the completion of share repurchases, indicating a priority on financial stability over capital return programs for the time being.

For the Nordea Revolver, $162,250,000 terminates in October 2022 and $1,110,200,000 now terminates in April 2024. For the BofA Term Loan, $307,500,000 matures in April 2022 and $554,000,000 now matures in October 2023. Both represent extensions of 18 months for consenting lenders.

Yes, for the Silversea Cruises Evolution-class vessel financing, the amendments introduce a minimum liquidity covenant consistent with other company facilities. The amendments also extend the period during which a breach of existing financial covenants will not trigger mandatory prepayments or defaults, pushing this out to the end of Q4 2022.