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COVID19: Royal Caribbean borrows $2.2bn to keep itself afloat. Share price up +23%

PortandTerminal.com, March 24, 2020

MIAMI, FL – Royal Caribbean announced on Monday that it has entered into a $2.2 billion secured term loan facility for the next year. This will give the company a total of $3.6 billion of liquidity to weather the current downturn in the cruise business. 

Shares of Royal Caribbean Cruises Ltd (NYSE:RCL) jumped as much as 23.1% in trading Monday after the company announced the debt offering. Shares closed up 18.6% and gave a little hope that cruise lines will make it through the current downturn in consumer spending. 

Share price chart for Royal Carribean
The announcement that it had secured $2.2 billion in debt gave Royal Caribbean’s share price a much-needed boost.

“This is a period of unprecedented disruption for the cruise industry,” said Jason T. Liberty, executive vice president and CFO.  “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.”

READ: Surprising no one, major cruise lines suspend ops. at US ports for 30 days

Royal Caribbean has been forced to suspend all sailings globally amid the COVID-19 pandemic. Sailings from the U.S. are tentatively scheduled to return to service on April 11, 2020. Royal Caribbean brands operate a total of 61 cruise ships with an additional 17 on order as of December 31, 2019.

READ: Royal Caribbean liability for volcano deaths may turn on ‘act of God’ defense

Last week, we reported that Carnival Corporation announced in a filing on Monday that it will borrow $3 billion for six months to meet its liquidity obligations.

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