Royal Caribbean gets term loans to fund two vessels, restates revolver

By Wendy Van Sickle

Columbus, Ohio, Oct. 17 – Royal Caribbean Cruises Ltd. entered into term loan credit agreements to finance its first and second Project Icon vessels on Oct. 11 and restated its $1.15 billion revolving credit facility on Oct. 12, according to an 8-K filed with the Securities and Exchange Commission.

The ships are scheduled for delivery in the second quarter of 2022 and 2024. Each agreement provides for an unsecured dollar-denominated term loan, the substantial majority of which is guaranteed 100% by Finnvera plc, the official export credit agency of Finland. Euler Hermes, the official export credit agency of Germany, provided a 95% guarantee of a smaller portion of the financing.

The maximum amount of each facility is equal to the U.S. dollar equivalent of 80% of the vessel purchase price, plus 100% of the premiums payable to Finnvera and Hermes.

Each loan will amortize semiannually and will mature 12 years after the delivery of the pertinent ship. About 75% of each loan will bear fixed interest of 3.56% for the first vessel and 3.76% for the second. The balance of the loans will accrue interest at Libor plus 110 basis points to 115 bps for the first vessel and Libor plus 115 bps to 120 bps for the second.

KfW IPEX-Bank GmbH is acting as initial mandated lead arranger and facility agent.

Revolving facility

Additionally, on Oct. 12, Royal Caribbean amended and restated its $1.15 billion unsecured revolving credit facility, extending the termination date until October 2022.

Advances under the amended revolver currently bear interest at Libor plus 117.5 bps, and there is a current facility fee of 20 bps.

The company has the option to increase the facility by up to $500 million.

Nordea Bank AB (publ) New York Branch is the administrative agent.

Citigroup Global Markets Ltd., Nordea, BBVA Securities Inc., DNB Markets, Inc., Fifth Third Bank, HSBC Securities (USA) Inc., BofA Merrill Lynch, Mizuho Bank, Ltd. Suntrust Robinson Humphrey, Inc. and Bank of Nova Scotia are the joint lead arrangers and bookrunners.

Royal Caribbean is a Miami-based cruise vacation company.

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