Tag Archives: Royal Caribbean Group

Royal Caribbean Group Raising $900 Million to Refinance Debt

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Royal Caribbean Group announced on Monday that it has commenced a private offering of senior convertible notes to be issued by the company due 2025 in an aggregate principal amount of up to $900 million.

In addition, the company intends to grant the initial purchasers an option to purchase up to an additional $135 million principal amount of Convertible Notes.

“The purpose of the offering is to replace some of the existing near-term maturities of convertible bonds with new longer-term convertible bonds in a manner which is non-dilutive to shareholders as described,” said Naftali Holtz, Chief Financial Officer of Royal Caribbean Group.

The cruise company said it intends to use the proceeds from the sale of the Convertible Notes to repurchase a portion of its 2.875% convertible senior notes due November 15, 2023, and 4.25% convertible senior notes due June 15, 2023, through open-market purchases, privately negotiated transactions, tender offers or otherwise. The Company intends to retire any Existing Convertible Notes so purchased.

“The proposed transaction proactively addresses the near-term maturity of our existing convertible notes,” said Holtz. “With the proceeds of this offering, our intention is to opportunistically repurchase the existing convertible notes, and we have the option to settle the remaining notes in cash to address our convertible debt maturities in a manner that is net neutral to our outstanding shares and share equivalents.”

The Convertible Notes will be convertible at the holder’s option in certain circumstances. Upon conversion, the company may satisfy its conversion obligation by paying or delivering, at its election, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock.

Royal Caribbean to Ditch Covid Testing on Short Sailings.

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Independence of the Seas in Southampton, Photo Credit Spacejunkie2

Royal Caribbean Group will ditch pre-embarkation testing for fully vaccinated guests on sailings of five days or less from 8 August, president and chief executive Jason Liberty has confirmed.

Speaking during Royal’s second quarterly results call on Thursday (July 28), Liberty said the change in policy would be “subject to local destination requirements” and unvaccinated passengers would still be tested.

“We also anticipate in the not-too-distant future that pre-embarkation testing for longer-duration voyages will be reduced,” he added.

Asked on the call when testing requirements for longer cruises might be lifted, Liberty predicted further easing could follow soon but did not rule out reintroducing measures if needed.

“So we’re starting off here by doing the five days or less and we’re going to look at that. But I think our expectation here, call it, in the next 45 days or so. And of course, following local requirements, which will somewhat dictate in some of our destinations, what those testing requirements will be that the majority of the testing requirements will be lifted, especially around the majority of our deployment,” he said.

“We might, depending on where the ships are going, take some additional protocols and of course, we’re going to continue to follow where Covid is in society and take the necessary actions.”

The update came as Royal announced a return to “positive operating cash flow” with the group’s entire fleet now back in service.

Average second-quarter (three months to 30 June) load factors ran to 82% and to nearly 90% in June, while the group expects third-quarter (three months to 30 September) load factors to average around 95% before “increasing to triple digits” by the end of the year.

Royal’s positivity came despite posting a US $500 million Q2 net loss, one the group said “exceeded the company’s expectations” and was “driven by better revenue and cost performance”.

In its trading update, the company revealed that second-quarter bookings for sailings departing in the second half of the year remained “significantly higher” than those received in Q2 2019 for the latter half of 2019.

Silverseas Acquires Crystel Endeavour for $275 Million

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Silversea Cruises has received court approval for the purchase of the ultra-luxury cruise ship Crystal Endeavor. 

Originally delivered to Crystal Cruises in 2021, the ship will be renamed Silver Endeavour when it officially joins the Royal Caribbean Group subsidiary later this month.

The purchase price for the vessel was $275 million and was fully financed through a 15-year unsecured term loan, guaranteed by the German export credit agency, Euler Hermes, with no amortization payments in the first two years.

The fifth expedition ship in Silversea’s fleet of 11, the vessel is scheduled to begin service in winter 2022/2023, spending its inaugural season in Antarctica starting November 2022.

“With Endeavour, we are seeking to grow our world-class fleet to meet the exceptional demand for ultra-luxury expedition cruising, while also enhancing our profitability profile and affirming Silversea’s position as the industry’s leading ultra-luxury and expedition cruise line,” said Jason Liberty, president and chief executive of Royal Caribbean Group. 

Built to PC6 polar class specifications, the ship can operate all of Silversea’s current expedition itineraries and is designed to take travellers to remote destinations, including both polar regions.

As part of the ongoing RCL Cares program, Royal Caribbean Group will protect the deposits of guests who were originally booked on Crystal Endeavor and make a new booking on one of its brands – Royal Caribbean International, Celebrity Cruises and Silversea Cruises. 

To the extent the Crystal Endeavor guests do not receive their deposits back from Crystal or other sources, the Royal Caribbean Group will refund any amount paid on their new booking up to the number of their lost deposits from Crystal.