Royal Caribbean Group modifies loans and gives them more financial flexibility
Royal Caribbean has filed documents with the United States Securities and Exchange Commission (SEC), which gives the company greater financial flexibility to meet its existing loans and obligations.
This is not the first time that Royal Caribbean has made such arrangements since the start of the global cruise stop.
Essentially, this means that they have extended or delayed loans to give more time to repay them later without defaulting on the loans.
There are two main elements to filing Form 8-K, which you can read verbatim here.
Amendments to the credit facility
On July 28, 2020, Royal Caribbean Cruises Ltd. (the “Company”, “us” and “us”) amended our $ 1.55 billion unsecured revolving credit facility maturing in 2022 with Nordea Bank ABP, New York branch, as administrative agent ( the “Nordea Revolver”), our $ 1.925 billion unsecured revolving credit facility maturing in 2024 with The Bank of Nova Scotia as administrative agent (the “BNS Revolver”), and our loan agreement. $ 1.0 billion 3-year unsecured term with Bank of America, NA, as administrative agent (the “Term Loan” and together with the Nordea Revolver and BNS Revolver, the “Credit Facilities” ).
These changes extend our waiver of fixed charge coverage and quarterly tested net debt to the funding clauses of each credit facility up to the fourth quarter of 2021 inclusive and increase the minimum liquidity clause tested monthly for the duration of the period. extended waiver. Under these changes, restrictions on the payment of cash dividends and share repurchases during the wavier period have been extended until the fourth quarter of 2021 inclusive. In addition, these changes incorporate the investment restrictions set out in the acts governing our senior 9.125%. secured notes due 2023, 10.875% senior secured notes due 2023 and 11.500% senior secured notes due 2025.
Certain of the lenders participating in the Modified Credit Facilities and affiliates of such parties from time to time provide banking, investing and other financial services to us for which they have received and will receive in the future customary fees.
The foregoing description of the provisions of the Amendments is summarized in nature and is qualified in its entirety by reference to the full and complete terms of the Amendments, copies of which are attached as Exhibits 10.1, 10.2 and 10.3 and incorporated herein by reference.
Modifications to the Export Credit Facility
On July 28, 2020, we entered into (i) a Financial Covenants Extension Consent Letter with KfW IPEX-Bank GmbH to amend our loan facilities guaranteed by Hermes, including, but not limited to , those committed to finance Quantum of the Seas, hymn of the seas, ovation of the seas, specter of the seas and Odyssey of the seas (collectively, the Hermes facilities ”) and (ii) modifications to the loan facilities backed by the BpiFAE committed to finance Celebrity Edge, Celebrity Apex, and Symphony of the Seas (the “Bpi Facilities”) in each case, in order to extend the period during which non-compliance with financial covenants will not trigger a mandatory prepayment or default, as the case may be, under each facility until the fourth quarter of 2021 inclusive. , on July 31, 2020, we amended the Finnvera-backed loan facilities committed to finance Icon 1, Icon 2 and Icon 3 (the “Finnvera Facilities” and together with the Hermes Facilities and the Bpi Facilities, the “Export Credit Facilities”) in order to extend the period during which non-compliance with financial commitments will not trigger a default under each facility through and including the fourth quarter 2021; provided that certain structural improvements are made no later than September 30, 2020. As part of these consents and modifications, we have agreed that some of our subsidiaries (none of which directly own a vessel) will issue guarantees for the outstanding debt under the Export Credit Facilities.
Certain of the lenders participating in the Export Credit Facilities, and affiliates of such parties, from time to time provide us with banking, investment banking and other financial services for which they have received, and will receive the usual costs in the future.
The foregoing description of the provisions of the Amendments is summary in nature and is qualified in its entirety by reference to the full and complete terms of the Amendments, copies of which are attached as Exhibits 10.4, 10.5, 10.6, 10.7 and 10.8 and incorporated. here by reference.