Royal Caribbean secures new funding to battle coronavirus downturn

Royal Caribbean Cruises has secured a $2.2 billion 364-day secured-term loan facility as the company battles the fallout from the coronavirus pandemic.

The move is designed to improve the liquidity position of the cruise line, with Royal Caribbean having immediately borrowed the full amount.

It comes as cruise lines, and the entire hospitality industry, face tremendous challenges due to the worldwide spread of Covid-19.

Royal Caribbean has currently suspended all of its sailings until at least early April.

Including this new financing, the company now has over $3.6 billion of liquidity, comprised of cash deposits and its existing undrawn revolving credit facilities (net of outstanding commercial paper).

In addition, the company has committed financing for all of its new ships on order.

“This is a period of unprecedented disruption for the cruise industry,” said Jason Liberty, executive vice president and chief financial officer at Royal Caribbean.

“We continue to take decisive actions to protect the company’s financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans.”

Morgan Stanley, JP Morgan, Bank of America, BNP Paribas and Goldman Sachs acted as joint lead arrangers and bookrunners on the secured term loan facility.

Royal Caribbean Cruises is the parent company of Royal Caribbean International, and operates sister brands Celebrity Cruises, Azamara and Silversea Cruises.