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Royal Caribbean announces pricing for its $2.0 billion of bonds

In:
05Jun2020
By: 
Matt Hochberg

Royal Caribbean Cruises Ltd. announced on Friday that it has priced its concurrent private offerings of $1.0 billion aggregate principal amount of 9.125% Senior Guaranteed Notes due 2023, and $1.0 billion aggregate principal amount of 4.250% Convertible Senior Notes due 2023.

The Senior Notes will mature on June 15, 2023. The Senior Notes will be fully and unconditionally guaranteed on a senior unsecured basis by a newly formed, direct wholly owned subsidiary of the Company that will own all the equity interests in the Company's subsidiaries that own seven of the Company's vessels. 

The Convertible Notes will mature on June 15, 2023, unless earlier converted, redeemed pursuant to a tax redemption or repurchased. The initial conversion rate per $1,000 principal amount of Convertible Notes is 13.8672 shares of common stock of the Company, which is equivalent to an initial conversion price of approximately $72.11 per share, subject to adjustment in certain circumstances. The initial conversion price represents a conversion premium of approximately 25.00% to the last reported sale price of $57.69 per share of the Company's common stock on The New York Stock Exchange on June 4, 2020.

The Convertible Notes will be convertible at the holder's option in certain circumstances. Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, at its election, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock. The Convertible Notes will not be guaranteed by any of the Company's subsidiaries.

In connection with the offering of the Convertible Notes, the Company granted certain of the initial purchasers of the Convertible Notes a 13-day option to purchase up to an additional $150.0 million aggregate principal amount of the Convertible Notes. The Notes are expected to be issued on or around June 9, 2020, subject to customary closing conditions. The closing of each of the Senior Notes offering and the Convertible Notes offering is not contingent upon the closing of the other offering.

The Company expects to use the combined net proceeds from the offerings of the Notes for general corporate purposes, which may include the repayment of indebtedness.