Royal Caribbean Cruises prices $1.5 billion in senior notes

MIAMI - Royal Caribbean Cruises Ltd. (NYSE:RCL), currently valued at nearly $90 billion in market capitalization, announced Monday it has priced a $1.5 billion offering of senior unsecured notes with a 5.375% interest rate due in 2036. The company currently operates with a moderate debt level of $19.7 billion.

The notes, which will mature on January 15, 2036, are expected to be issued around October 1, 2025, subject to customary closing conditions.

Royal Caribbean plans to use the proceeds to finance the upcoming delivery of Celebrity Xcel instead of using its existing committed export credit agency facility. The remaining funds will be directed toward redeeming, refinancing, or repurchasing existing debt, including amounts outstanding under its revolving credit facilities.

BofA Securities, Inc., Goldman Sachs & Co. LLC, and Morgan Stanley & Co. LLC are serving as lead book-running managers for the offering.

The notes offering is being made through an automatic shelf registration statement filed with the Securities and Exchange Commission on February 29, 2024.

Royal Caribbean Group operates a global fleet of 68 ships across five brands including Royal Caribbean, Celebrity Cruises, and Silversea. The company also maintains a 50% joint venture interest in TUI Cruises, which operates the Mein Shiff and Hapag-Lloyd Cruises brands.

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

In other recent news, Royal Caribbean Cruises Ltd. reported several significant developments. Fitch Ratings upgraded the company’s Long-Term Issuer Default Rating to ’BBB’ from ’BBB-’, citing stronger-than-expected leverage metrics and continued debt reduction. Additionally, Royal Caribbean announced a registered public offering of senior unsecured notes, with plans to use the proceeds for financing the delivery of Celebrity Xcel and managing existing debt. The company also declared a quarterly dividend increase to $1.00 per share, reflecting its strong performance and commitment to shareholders.

On the analyst front, Truist Securities lowered its price target for Royal Caribbean to $333 due to anticipated higher taxes in 2026, while maintaining a Hold rating. In contrast, Tigress Financial Partners raised its price target to $415, maintaining a Buy rating, highlighting strong demand and increased travel market penetration. These differing analyst perspectives underscore the varied expectations for the company’s future performance. These updates provide a snapshot of Royal Caribbean’s current financial and strategic positioning.

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