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Royal Caribbean Group Raising $900 Million to Refinance Debt

  • August 1, 2022

Royal Caribbean Group announced on Monday that it has commenced a private offering of senior convertible notes to be issued by the company due 2025 in an aggregate principal amount of up to $900 million.

In addition, the company intends to grant the initial purchasers an option to purchase up to an additional $135 million principal amount of Convertible Notes.

“The purpose of the offering is to replace some of the existing near-term maturities of convertible bonds with new longer-term convertible bonds in a manner which is non-dilutive to shareholders as described,” said Naftali Holtz, Chief Financial Officer of Royal Caribbean Group.

The cruise company said it intends to use the proceeds from the sale of the Convertible Notes to repurchase a portion of its 2.875% convertible senior notes due November 15, 2023 and 4.25% convertible senior notes due June 15, 2023  through open-market purchases, privately negotiated transactions, tender offers or otherwise. The Company intends to retire any Existing Convertible Notes so purchased.

“The proposed transaction proactively addresses the near-term maturity of our existing convertible notes,” said Holtz. “With the proceeds of this offering, our intention is to opportunistically repurchase the existing convertible notes, and we have the option to settle the remaining notes in cash to address our convertible debt maturities in a manner that is net neutral to our outstanding shares and share equivalents.”

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.

 

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