Summary
Royal Caribbean Cruises Ltd. (RCL) announced on August 5, 2024, that it has entered into privately negotiated exchange agreements with holders of its 6.000% Convertible Senior Notes due 2025. These agreements involve the exchange of approximately $731 million in principal amount of these notes for a combination of cash and shares of RCL's common stock. The company intends to fund the cash portion of the exchange using its revolving credit facilities. This transaction is expected to close around August 16, 2024, and will reduce the number of diluted shares outstanding. The exchange represents a significant portion, about 63.6%, of the outstanding 2025 Notes, leaving approximately $419 million in principal amount still outstanding. The shares issued in this exchange will be unregistered and issued under a private placement exemption, relying on the noteholders being accredited investors and qualified institutional buyers. This move aims to proactively manage its debt profile and capital structure.
Key Highlights
- 1RCL entered into exchange agreements to repurchase approximately $731 million of its 6.000% Convertible Senior Notes due 2025.
- 2The exchange consideration will consist of a mix of cash and RCL common stock.
- 3The cash component will be financed through borrowings under the company's revolving credit facilities.
- 4Approximately 63.6% of the outstanding 2025 Notes principal amount is being exchanged.
- 5Following the exchange, about $419 million of the 2025 Notes will remain outstanding.
- 6Shares issued will be unregistered, part of a private placement to accredited and qualified institutional buyers.
- 7The transaction is expected to reduce the company's fully diluted weighted average shares outstanding.