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How Royal Caribbean Is Looking to Weather the COVID-19 Crisis

Saturday, March 28, 2020

Amid the complete shutdown of operations through at least April 30 due to the coronavirus crisis, Royal Caribbean Cruises Ltd. (RCCL) said it has entered into a $2.2 billion 364-day secured term loan facility, further enhancing the company's liquidity position. The facility can be extended at the company's option for an additional 364 days. Royal Caribbean has borrowed the full amount available under the term loan to further bolster its liquidity.

Including this new financing, the company has more than $3.6 billion of liquidity comprised of cash deposits and its existing undrawn revolving credit facilities (net of outstanding commercial paper).  In addition, the company has committed financing for all of its new ships on order. "This is a period of unprecedented disruption for the cruise industry," said Jason Liberty, executive vice president and CFO of RCCL  "We continue to take decisive actions to protect the company's financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans."

Morgan Stanley, J.P. Morgan, Bank of America, BNP Paribas and Goldman Sachs acted as joint lead arrangers and bookrunners on the secured term loan facility.  Morgan Stanley is acting as an administrative agent and collateral Agent on the facility.  Perella Weinberg Partners LP served as financial advisor and Skadden Arps, Slate, Meagher & Flom LLP served as legal advisor to the company in connection with the secured term loan facility.

RCCL controls and operates four global brands: Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises. It also is a 50 percent joint venture owner of the German brand TUI Cruises and a 49 percent shareholder in the Spanish cruise brand Pullmantur Cruceros. Together these brands operate a combined total of 61 ships with an additional 17 on order as of Dec. 31, 2019. 

By     James Shillinglaw

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