Summary
Royal Caribbean Cruises Ltd. (RCL) has successfully completed a private offering of $1.5 billion in aggregate principal amount of 5.625% Senior Notes due 2031. The primary use of these net proceeds, approximately $1.49 billion, is to strategically refinance existing debt. Specifically, the company will redeem all outstanding 7.250% Senior Notes due 2030, totaling $700 million, which will eliminate all guaranteed or secured notes. Additionally, RCL will fully repay the $232 million finance lease for the _Silver Dawn_. This refinancing is expected to improve the company's interest expense profile by replacing higher-cost debt with lower-cost debt. The new notes carry a fixed interest rate of 5.625% and mature in 2031. The company also retains flexibility through various redemption options, including make-whole provisions and potential redemptions using equity offering proceeds, while covenants in the new indenture impose customary restrictions on liens, sale-leasebacks, and asset transfers.
Key Highlights
- 1Completion of $1.5 billion private offering of 5.625% Senior Notes due 2031.
- 2Net proceeds of approximately $1.49 billion raised.
- 3Redemption of all $700 million of 7.250% Senior Notes due 2030.
- 4Elimination of all guaranteed or secured notes outstanding.
- 5Full repayment of the $232 million _Silver Dawn_ finance lease.
- 6New notes carry a fixed interest rate of 5.625% maturing in 2031.
- 7Indenture includes covenants restricting liens, sale-leasebacks, and asset transfers, along with change of control provisions.