$2.45bn iiquidity currently
Issuing further debt had been anticipated among a host of actions to boost liquidity during the COVID-29 era. The company currently has $2.45bn in liquidity.
Proceeds to repay 364-day term loan
RCL expects to use the net proceeds of the notes offering to repay its $2.35bn, 364-day senior secured term loan agreement with Morgan Stanley Senior Funding as the administrative agent and collateral agent and the other lenders in the March 23 facility. The remainder of the net proceeds would go to general corporate purposes, which may include additional debt repayments.
Secured by 28 ships and intellectual property
The notes and the related guarantees will be secured by 28 ships and material intellectual property. The offering is being made to qualified institutional buyers outside the US.
As of April 30, RCL had liquidity of approximately $2.3bn in the form of cash and cash equivalents. On May 4, the company increased its 364-day senior secured loan agreement and drew $150m, further enhancing its liquidity profile.
According to Wells Fargo Securities, that total $2.45bn would be adequate for six to 6.5 months in the current environment.