Summary
Royal Caribbean Cruises Ltd. (RCL) announced on February 8, 2023, the commencement of a private offering for senior guaranteed notes due 2030. The primary purpose of this offering is to refinance existing debt that matures in 2023 and 2024, thereby strengthening its balance sheet and improving its debt maturity profile. The notes will be guaranteed by RCI Holdings LLC, a subsidiary that holds significant vessel assets, including seven high-value cruise ships with an aggregate net book value of approximately $7.1 billion as of September 30, 2022. This strategic move to raise capital through new debt issuance indicates the company's proactive approach to managing its financial obligations. Investors should note that the company also intends to terminate a $700 million 364-day term loan facility upon the closing of this note offering, signaling a shift in its short-term financing strategy. The offering is being conducted under specific exemptions for qualified institutional buyers and non-U.S. investors, highlighting its targeted nature.
Key Highlights
- 1Commencement of a private offering for senior guaranteed notes due 2030.
- 2Proceeds intended to repay principal on debt maturing in 2023 and/or 2024.
- 3Notes guaranteed by RCI Holdings LLC, which holds seven key vessels with a net book value of ~$7.1 billion (as of Sep 30, 2022).
- 4The guaranteed vessels are bareboat chartered to various operating subsidiaries with five-year terms, extendable by five years.
- 5Subsidiaries not guaranteeing the notes represented 43.2% of total assets as of September 30, 2022.
- 6Intention to terminate a $700 million 364-day term loan facility expiring in August 2023 upon closing of the note offering.
- 7Offering is targeted to qualified institutional buyers (Rule 144A) and certain non-U.S. investors (Regulation S).