Royal Caribbean raised $3.32 billion in senior protected notes on May13 The much-needed money comes at a steep expense. Royal Caribbean will pay a 10.875%rates of interest on $1 billion in financial obligation due on June 1, 2023 and 11.5%on $2.32 billion in debt due on June 1,2025 The notes will be secured in part by 28 of Royal Caribbean’s cruise ships.
The cruise-line operator plans to use the profits to repay its $2.35 billion senior secured term loan, in addition to basic business purposes.
Royal Caribbean’s $3.3 billion debt sale might keep it cruising well into the future. Image source: Getty Images.
Regardless of the high interest costs, financiers appear to be breathing a sigh of relief that Royal Caribbean had the ability to raise more than $3 billion in fresh capital. With its ships docked due to the coronavirus-related cruising constraints, Royal Caribbean is bleeding money.
Investors are hoping that this debt offering will provide the beleaguered business a chance to survive enough time to resume regular cruising operations and perhaps see the end to the COVID-19 crisis.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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Joe Tenebruso has no position in any of the stocks discussed.
The Motley Fool has no position in any of the stocks discussed. The Motley Fool has a disclosure policy