Royal Caribbean gets $1 billion new term loan, increases revolver

By Sarah Lizee

Olympia, Wash., April 10 – Royal Caribbean Cruises Ltd. got a new $1 billion unsecured three-year term loan agreement on April 5 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The borrowing amount may be increased by an additional $350 million from time to time, subject to additional lender commitments.

The proceeds were used to refinance debt, including the $700 million 364-day unsecured term loan Royal borrowed in the third quarter of 2018 to finance a portion of its acquisition of Silversea Cruise Holding Ltd. and the remaining balance of the facility originally incurred in 2010 to purchase Allure of the Seas.

Interest accrues at Libor plus a margin that varies with the company’s senior debt rating. Currently, interest is Libor plus 107.5 per year.

BofA Merrill Lynch, BBVA Securities Inc., Sumitomo Mitsui Banking Corp., Bank of Nova Scotia, Wells Fargo Securities LLC and DNB Markets Inc. are the joint lead arrangers and joint bookrunners.

Banco Bilbao Vizcaya Argentaria, SA New York Branch, Sumitomo Mitsui, Scotiabank, Wells Fargo Bank, NA and DNB are syndication agents.

Regions Bank, PNC Bank, NA and U.S. Bank NA are documentation agents.

Amended revolver

The company also amended its unsecured revolving credit facility with Scotiabank to extend the termination date through April 2024 from 2020, increase the size to $1.7 billion from $1.4 billion, and reduce pricing, according to the 8-K.

The amendment was completed April 5.

Both the interest rate and the facility fee vary with the company’s senior debt rating and, following the amendment, are currently set at Libor plus 100 bps per year and 12.5 bps per year, respectively.

Under the amended facility, Royal may increase the capacity of the facility by an additional $300 million from time to time, subject to additional lender commitments.

As before, the facility requires the company to maintain a fixed charge coverage ratio as well as limit its net debt-to-capital ratio. The new term loan also contains these requirements.

Scotiabank, BofA Merrill Lynch, BBVA, Citigroup Global Markets Ltd., Fifth Third Bank, JPMorgan Chase Bank, NA, Mizuho Bank, Ltd., Sumitomo Mitsui and SunTrust Robinson Humphrey, Inc. are joint lead arrangers and joint bookrunners.

Bank of America, Banco Bilbao, Citigroup, Fifth Third, JPMorgan, Mizuho, Sumitomo Mitsui and SunTrust Bank are syndication agents.

Royal Caribbean is a Miami-based cruise vacation company. Silversea is a luxury cruise line that is based in Monaco.

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