Royal Caribbean prices bonds

Rajesh Joshi - Thursday 2 July 2009

ROYAL Caribbean will pay 11.9% interest on a $300m offering of six-year senior notes maturing in 2015, writes Rajesh Joshi in New York .

The bonds will be issued on Monday at 97.4% of their face value, the company said.

It intends to use the proceeds for repayment of existing debt and general corporate purposes. Royal Caribbean chairman and chief executive Richard Fain said the company enjoys "solid liquidity", and the cash was being raised as a "proactive and opportunistic" tactic in today's uncertain times.

The company's quarterly report, filed with US regulators in April, said it had a working capital deficit of $1.6bn as at March 31, but historically has been able to maintain this level because of cash flow from operations.

For the 12 months to March 31, 2010, Royal Caribbean has capital contractual obligations of $2.6bn on its six newbuildings, including two Oasis-class vessels for Royal Caribbean and Celebrity Cruises' four
Solstice-class ships being built in Germany.

Confirmed loan financing for the second Oasis-class ship has yet to be arranged.

Existing cash flow and existing credit
facilities will cover its capital expenditures and debt repayments over the coming year, the company said.

Steve Gordon
http://www.offshoreinjuries.com