MIAMI - Royal Caribbean Cruises Ltd. (NYSE:RCL) announced today that it has priced a private offering of $1.25 billion in senior unsecured notes with a 6.25% yield, maturing on March 15, 2032. The offering, originally set at a lower amount, was upsized due to investor demand. The notes are slated for issuance around March 7, 2024, subject to customary closing conditions.
The cruise operator specified that the proceeds from the notes would be used to redeem its outstanding 11.62% Senior Notes due in 2027. This redemption strategy includes covering the associated fees and expenses. The company aims to manage its debt profile by taking advantage of current market conditions to refinance older, higher-cost debt.
The notes are being offered exclusively to qualified institutional buyers according to Rule 144A under the Securities Act of 1933, and to certain non-U.S. investors outside the United States under Regulation S. These notes will not be available for public trading in the U.S. as they will not be registered under the Securities Act or any state securities laws.
Royal Caribbean, a leading name in the cruise industry, operates a global fleet and is recognized for its various cruise brands, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. The company is also involved in joint ventures that manage TUI Cruises and Hapag-Lloyd Cruises. As of the end of 2023, the group's combined brands have eight additional ships on order, indicating ongoing expansion efforts.
This announcement comes amid a broader context where the cruise industry is navigating through various challenges such as travel restrictions, health concerns, and economic uncertainties. Royal Caribbean's move to refinance its debt is seen as a strategic step to strengthen its financial position.
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