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That's very interesting....NCL is one of the smallest of the Major Cruise Line Corps; so, in many ways, they were probably the most likely to be the 1st, to leverage some of their holdings. I remember reading sometime ago, around 5 or 6 yrs ago, why NCL pull back on continue developing of the Epic class of ship...they were not happy with that class. I suspect the Epic was their largest holding, that they could leverage, that they was more than willing, to gamble & possible loose.

I would have been completely surprise if Royal had take such a move...even with one of their most least profitable or older holding, outside of Empress, Majesty, & Enchantment, or some combination there of. Royal, Imho, no doubt, is in the best position to weather this storm...which in some ways is still surprising, they would expand/increase their loans by another $550Mil. Those guys are very business savvy & have a pretty sound assessment, of their strength and position in the market. This move maybe more about staying ahead of the curve, moving forward(futures market), than something more presently dire. 

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1 minute ago, BB1 said:

I could be wrong  but my understanding is that they are expanding their line of credit.  That is not the same as borrowing the money, although potentially they could. Interest rates are at historic lows. It might be a good ideA to use that credit line to pay off more expensive debt. That's what I would do.

This is my understanding as well.

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13 minutes ago, BB1 said:

I could be wrong  but my understanding is that they are expanding their line of credit.  That is not the same as borrowing the money, although potentially they could. Interest rates are at historic lows. It might be a good ideA to use that credit line to pay off more expensive debt. That's what I would do.

LoL...that's what a LoC is. It's just a revolving loan....reasons why I said "Expand/Increase"

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25 minutes ago, BB1 said:

Sorry,  your topic states Royal Caribbean borrows to stay afloat.  That didn't seem to match the situation.  It has an air of desperation that may or may not be warranted. 

 

15 minutes ago, BB1 said:

That's the problem when you copy click bait sensationalized headlines. They misrepresent the situation.  This seems to be big cause of the exaggerated hysteria right now.

I did not copy & paste...I did give a brief account of their article title, just to keep from having a long title for this thread.

 

I understand your frustration with the media...there is no doubt the media is sensationalizing the situation; however, that does not change the fact, there is a "Real Situation" occurring around the globe...so it's not an "Exaggeration" at least, not to me. I would advise people to really try to keep their emotion down as best as possible(I know we all are different), and just look at thing as they are, and follow up with sound personal decisions & interpretation of information. When one let their emotions take over & rule the day, regardless of what side one stand on, is when panic & unfound chaos occurs.

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RCL has lost over 2/3 of its market cap and the short term future looks very bleak as they will find it hard to maintain high occupancy on their ships..I don't think it is an exaggeration to say the entire cruise industry is in uncharted waters at this point. I am hoping more than anyone that this blows over but even many avid cruisers are cancelling their vacations right now.

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It seems like a good,time to buy some stock in some of the cruise lines,ride it out, cruising is a hot industry and things will pass. With that being said, Royal has spent so much on being bigger and better and taken small things away from the customer . Cruising 20 years ago was just simpler and better in my opinion. 

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I have been concerned for months about the continual RCL spending and bragging they use as advertisement:

$250M for Coco Cay

$300M for a new corporate headquarters

$250M to make a new terminal in Miami and make the dock 100 feet longer

$165M to revitalize Allure

$116M to amplify Freedom

$300M for an existing hotel and dock in Freeport

and on and on and on........

 

I mentioned this today on the Insiders FB group and it's worth stating here;  I think Royal is in serious trouble because this elephant does not dance to slow music. 

I think they will dock all the ships until at least September. It will be cheaper to cease operation than try to combat the hostile environment.

 

I think this could very well happen in the next 30 days.

 

 

 

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5 minutes ago, bobroo said:

I think they will dock all the ships until at least September.

Do you mean all the ships under every RCL brand -- Royal, Celebrity, and Azamara? I'd be stunned beyond belief if that happened, especially for that long.

Royal by itself? Honestly, I'd be stunned if they docked all of those ships since that's the fleet that caters to the youngest and therefore most resilient crowd

Celebrity? God, I hope not. At least not all the way out to September, or there goes my Iceland & Greenland trip that leaves on August 2. 😰

Azamara? This one I might believe because of their primary demographic (retired and elderly), who are at greatest risk. But it's also the smallest fleet and probably wouldn't save them much since the ships are all relatively tiny to begin with.

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7 hours ago, accio7 said:

Be thankful that Royal did not put up one of their ships as collateral like NCL did with Epic: https://www.seatrade-cruise.com/news/nclh-secures-additional-675m-liquidity-amid-coronavirus-uncertainty

Surely in reality its exactly the same thing, the RC extended credit would be based on company value, assets and current debt {Or its a a personal lone from a very rich friend}. The only difference here is that they haven't committed a particular asset as collateral. If after the team of said credit stream {and they have drawn on the credit} the financial institution can seize any appropriate asset.

As some have said perhaps NCL are prepared to sacrifice a ship that has not proven very popular in some markets.

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19 hours ago, Zambia-Zaire said:

https://www.fox5ny.com/news/royal-caribbean-increases-borrowing-capacity-by-550-million-to-stay-afloat

 

It make much more sense now, why they raised prices for cruises after the "Cruise With Confidence" deadline of July 31, 2020 in conjunction with Future Cruise Credit(FCC).

Perhaps the security of having "Future Cruise Credits" is not such a good option.

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1 hour ago, bobroo said:

I think they will dock all the ships until at least September. It will be cheaper to cease operation than try to combat the hostile environment.

I'm not a financial person but total revenue as of 12/31/2019 is just shy of 11 billion and profit is just shy of 5 billion. They'll weather the storm. Of course having access to a larger line of credit will help keep big projects plugging along while they take the financial impact.

In no way do I see them docking any ship. The process to take a boat out of a local marina is a pain (getting it wrapped and all that) imagine a cruise ship! 

Screenshot_20200311-191138.png

Edited by sk8erguy1978
Add that it's 2019 year end numbers.
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6 hours ago, tydas said:

RCL has lost over 2/3 of its market cap and the short term future looks very bleak as they will find it hard to maintain high occupancy on their ships..I don't think it is an exaggeration to say the entire cruise industry is in uncharted waters at this point. I am hoping more than anyone that this blows over but even many avid cruisers are cancelling their vacations right now.

RCI lost 67% in 2008, so far they are only at 61% but that will change this week.  It's not exactly unchartered waters, they managed the last couple of times, they'll weather through again.  It's not just cruise industry stock either, the whole market is in the dumps.  

PS - It'll be something else in 2028 or 2030.    This isn't the first and it won't be the last time the stock takes a big hit.  Wait for the bottom and start buying when it starts to consistently trend upward. 

Also, last year when asked about a pending recession that in the winds Royal responded that they won't make the mistake they made last time.   Last time they put projects and expansion on hold during the downturn.  They stated next time they'll continue with expansion targets taking advantage of softening in shipyard business and the like to turn it into an advantage.  

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11 hours ago, twangster said:

RCI lost 67% in 2008, so far they are only at 61% but that will change this week.  It's not exactly unchartered waters, they managed the last couple of times, they'll weather through again.  It's not just cruise industry stock either, the whole market is in the dumps.  

PS - It'll be something else in 2028 or 2030.    This isn't the first and it won't be the last time the stock takes a big hit.  Wait for the bottom and start buying when it starts to consistently trend upward. 

Also, last year when asked about a pending recession that in the winds Royal responded that they won't make the mistake they made last time.   Last time they put projects and expansion on hold during the downturn.  They stated next time they'll continue with expansion targets taking advantage of softening in shipyard business and the like to turn it into an advantage.  

I missed out in 2009 and will not miss out here. I might not buy 100 shares for the OBC offer, but will be considering a few shares to add to my portfolio.  

To your last point, maybe that's the reason for the line of credit, as my guess, to keep projects moving and customers happy (refunds, etc which will hit bottom lines and publicized come next earnings report).  

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