Royal Caribbean enters into €178 million dollar-equivalent term loan

By Tali Rackner

Norfolk, Va., April 21 - Royal Caribbean Cruises Ltd. entered into a credit agreement on April 15 for the dollar financing of a portion of its third Oasis-class ship, according to an 8-K filing with the Securities and Exchange Commission.

The facility provides for an unsecured term loan in the dollar equivalent amount of about €178 million.

Once funded, the term loan will amortize semiannually and will mature 12 years after the delivery of the ship, which is scheduled to occur in the second quarter of 2016.

At the company's option, interest will accrue at either 2.53% or a floating rate of Libor plus 120 basis points.

Bank of Tokyo-Mitsubishi UFJ, Ltd., Banco Santander, SA and KfW IPEX-Bank GmbH are the lead arrangers with Bank of Tokyo-Mitsubishi UFJ as facility agent and documentation agent and Banco Santander as Coface agent.

In connection with the agreement, Royal Caribbean amended the €892 million credit agreement originally entered into on July 9, 2013 to finance the purchase of the vessel to reduce the maximum facility amount to roughly €714 million.

Both the existing euro-denominated facility and the new dollar-denominated facility are 100% guaranteed by Compagnie Francaise d'Assurance pour le Commerce Exterieur (Coface), the export credit agency of France.

The new dollar agreement also contains customary events of default and prepayment events for, among other things, non-payment, breach of covenants, default on certain other debt, certain large judgments and a change of control of the company.

Royal Caribbean is a Miami-based cruise vacation company.

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