Royal Caribbean Group prices upsized $2b notes offering (updated)

The offering was increased from $1.5b.

The notes are expected to be issued on or around Aug. 12.

Use of proceeds

The company intends to use the proceeds, together with borrowings under its revolving credit facilities, to redeem all of its outstanding 9.25% senior notes due 2029 and its outstanding 8.25% senior secured notes due 2029, which comprise its remaining secured debt.

The notes are being offered only to qualified institutional buyers outside the US.

William Blair raises estimate on interest savings

Update: William Blair & Co. estimated the refinancing could save Royal Caribbean about 19 cents per share in annualized interest expense.

As a result, the brokerage raised its 2024 earnings per share estimate for RCL by 7 cents, to $11.53 (versus the $11.36 consensus). The 2025 estimate goes up 19 cents, to $13.99 (versus the $13.21 consensus) and the 2026 estimate also increases 19 cents, to $17.39 (versus the $15.20 consensus).

William Blair reiterated its 'outperform' (buy) rating for RCL at 11.1 times its 2025 EPS estimate.

Shares opened at $156.24 Tuesday and were trading up.