Royal Caribbean completes $1.5 billion senior notes offering

MIAMI - Royal Caribbean Cruises Ltd. (NYSE:RCL) announced Wednesday it has completed a registered public offering of $1.5 billion in senior unsecured notes with a 5.375% interest rate due in 2036. The cruise operator, currently valued at $86 billion, has seen its stock surge nearly 89% over the past year, significantly outperforming the broader market. According to InvestingPro analysis, the company maintains a perfect Piotroski Score of 9, indicating strong financial health.

The cruise operator plans to use the proceeds to finance the upcoming delivery of Celebrity Xcel instead of utilizing its existing committed export credit agency facility. The remaining funds will be directed toward redeeming, refinancing, or repurchasing existing debt, including amounts outstanding under revolving credit facilities. The company currently operates with a moderate debt level, maintaining a debt-to-equity ratio of 2.15.

The notes, which will mature on January 15, 2036, unless earlier redeemed or repurchased, were offered through lead book-running managers BofA Securities, Goldman Sachs, and Morgan Stanley.

"As our relaunch into the investment grade market, this transaction serves as a testament to the strength of both the Company and its balance sheet," said Naftali Holtz, Chief Financial Officer of Royal Caribbean Group. InvestingPro’s comprehensive analysis reveals the company’s strong financial position, with an EBITDA of $6.2 billion and a "GREAT" overall financial health score. Discover 10+ additional exclusive insights and detailed valuations with an InvestingPro subscription.

The offering was made pursuant to an automatic shelf registration statement filed with the Securities and Exchange Commission on February 29, 2024, which became effective upon filing.

Royal Caribbean Group operates a global fleet of 68 ships across five brands, including Royal Caribbean, Celebrity Cruises, and Silversea. The company also owns a 50% joint venture interest in TUI Cruises. With a robust revenue growth of 12% and an impressive gross profit margin of 50%, the company demonstrates strong operational efficiency. Access the complete Pro Research Report and in-depth analysis through InvestingPro.

This article is based on a press release statement from Royal Caribbean Group.

In other recent news, Royal Caribbean Cruises Ltd. has announced the pricing of a $1.5 billion offering in senior unsecured notes with a 5.375% interest rate due in 2036. The notes are expected to be issued around October 1, 2025, pending customary closing conditions. Additionally, Fitch Ratings has upgraded Royal Caribbean’s Long-Term Issuer Default Rating to ’BBB’ from ’BBB-’, citing stronger-than-expected leverage metrics and continued debt reduction. This upgrade also extends to the company’s senior unsecured bonds, which were also raised to ’BBB’.

In a strategic move, Royal Caribbean has secured shipbuilding rights at the Meyer Turku shipyard in Finland through 2036, confirming an order for the fifth Icon Class ship scheduled for delivery in 2028. The agreement includes an option for a seventh Icon Class vessel, complementing a previously announced option for a sixth ship. The cruise operator plans to use proceeds from the senior unsecured notes offering to finance the delivery of Celebrity Xcel and manage existing debt. These developments highlight Royal Caribbean’s continued focus on growth and financial management.

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