Royal Caribbean tightens talk on $1 billion three-year convertibles to yield 4.25%-4.5%, up 25%

By Abigail W. Adams

Portland, Me., June 4 – Royal Caribbean Cruises Ltd. tightened talk on its offering of $1 billion three-year convertible notes, which it plans to price after the market close on Thursday, to a coupon of 4.25% to 4.5% and an initial conversion premium of 25%, according to a market source.

Initial price talk was for a coupon of 5% to 5.5% and an initial conversion premium of 20% to 25%.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are bookrunners on the Rule 144A deal, which carries a greenshoe of $150 million.

The notes are non-callable.

The convertibles will be settled in cash, shares or a combination of both at the company’s option.

Concurrently, the company plans to price $1 billion of senior notes with price talk for a yield in the high 9% to 10% area.

Proceeds will be used for general corporate purposes, which may include the repayment of debt.

Royal Caribbean is a Miami-based cruise ship operator.

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