The company also intends to grant the initial purchasers an option to buy up to an additional $135m in notes.
Non-dilutive intent
CFO Naftali Holtz said the purpose of the offering is to replace some existing near-term maturities of convertible bonds with new longer-term convertible bonds in a manner that is non-dilutive to shareholders.
Use of proceeds
Royal Caribbean intends to use the proceeds to buy back a portion of its 2.875% convertible senior notes due Nov. 15, 2023, and 4.25% convertible senior notes due June 15, 2023, through open-market purchases, privately negotiated transactions, tender offers or otherwise. Any existing convertible notes purchased will be retired.
Option to settle in cash
'The proposed transaction proactively addresses the near-term maturity of our existing convertible notes,' Holtz said. '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 notes will be convertible at the holder's option in certain circumstances. Royal Caribbean may elect to satisfy its obligation by cash, shares of common stock or a combination of cash and shares.
The notes are being offered only to qualified institutional investors outside the US.
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