RCL secures $200m additional liquidity through export-credit debt holiday initiatives

Hermes initiative

Two of these relate to the loan facilities incurred to finance Anthem of the Seas and Spectrum of the Seas in order to incorporate the benefits of a 12-month debt holiday initiative offered by Hermes, Germany's export credit agency.

The intention of this initiative is to provide interim debt service and financial covenant relief during the current global health crisis to cruise-line borrowers with respect to their Hermes-guaranteed financings.

The lenders made available a new tranche of each loan with proceeds to be used to repay any principal amortization payments due on the facilities between April 1, 2020, and March 31, 2021.

Deferred tranche payable between April 2021 and October 2024

This 'deferred tranche' will be repayable in eight semi-annual installments between April 2021 and October 2024. Interest will accrue at the same floating rate that applies to the existing loan — LIBOR plus 1.3% per annum in the case of Anthem and LIBOR plus 0.95% per annum in the case of Spectrum. Interest is payable during the deferral period.

The lenders also agreed that during this deferral period, a breach of the financial covenants will not trigger a mandatory prepayment. RCL would be required to prepay, however, if it takes certain actions, including paying dividends, buying back stock and issuing debt or equity other than for liquidity.

Celebrity Reflection, too

In addition, RCL amended the export-credit backed loan facility incurred to finance Celebrity Reflection to incorporate the benefits of the debt holiday.