Royal Caribbean tightens talk on $500 million three-year convertibles to 2.875%-3.375%, up 30%-35%

By Abigail W. Adams

Portland, Me., Oct. 13 – Royal Caribbean Cruises Ltd. tightened talk on its $500 million offering of three-year convertible notes, which are slated to price after the market close on Tuesday, to a coupon of 2.875% to 3.375% and an initial conversion premium of 30% to 35%, according to a market source.

Initial price talk was for a coupon of 3.375% to 3.875% and an initial conversion premium of 25% to 30%.

Morgan Stanley & Co. LLC (lead left) and BofA Securities Inc. are active bookrunners for the Rule 144A deal, which carries a greenshoe of $75 million.

The notes are non-callable.

Concurrently with the convertible notes offering, Royal Caribbean plans to price a secondary offering of $500 million shares. The secondary offering carries a $75 million greenshoe.

Proceeds will be used to repay the company’s 2.65% senior notes due 2020 and for general corporate purposes.

Royal Caribbean is a Miami-based cruise line operator.

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