Royal Caribbean greenshoe ups three-year convertibles to $1.15 billion

By Sarah Lizee

Olympia, Wash., June 9 – Underwriters for Royal Caribbean Cruises Ltd.’s three-year convertible notes fully exercised their $150 million greenshoe, bringing the total deal size to $1.15 billion, according to a press release.

As previously reported, the company priced $1 billion of the convertible notes after the market close on Thursday at par with a coupon of 4.25% and an initial conversion premium of 25%, according to a company news release.

Pricing came at the rich end of tightened talk for a coupon of 4.25% to 4.5% and in line with talk for a fixed 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, BofA Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and SMBC Nikko Securities America, Inc. were bookrunners on the Rule 144A deal.

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 priced a $1 billion offering of three-year senior notes at par to yield 9 1/8%. Initial price talk for the senior notes was 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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