Item 1.01 Entry into a Material Definitive Agreement.
5.375% Senior Notes due 2027
On January 7, 2022, Royal Caribbean Cruises Ltd. (the "Company") completed its
previously announced offering of $1,000,000,000 aggregate principal amount of
5.375% Senior Notes due 2027 (the "Notes"). The Company received net proceeds
from the offering of approximately $988.2 million, which it intends to use for
the repayment of principal payments on debt maturing in 2022 (including to pay
fees and expenses in connection with such repayments). Pending such uses, the
Company may temporarily apply the proceeds to repay borrowings under its
revolving credit facilities or other borrowings.
The Notes were issued by the Company pursuant to an indenture, dated January 7,
2022 (the "Indenture"), between the Company and The Bank of New York Mellon
Trust Company, N.A., as trustee, principal paying agent, transfer agent and
Interest on the Notes accrues from January 7, 2022 and is payable semi-annually
in arrears on January 15 and July 15 of each year, beginning on July 15, 2022,
at a rate of 5.375% per year. The Notes will mature on July 15, 2027 unless
earlier redeemed or repurchased.
The Company may, at its option, redeem, at any time and from time to time prior
to October 15, 2026 (the date that is nine months prior to the maturity date of
the Notes) (the "Par Call Date"), some or all of the Notes at 100% of the
principal amount thereof plus accrued and unpaid interest, if any, to the
redemption date plus the applicable "make-whole premium" described in the
Indenture. On or after the Par Call Date, the Notes will be redeemable, at the
Company's option, in whole or in part, at a redemption price equal to 100% of
the principal amount of the Notes to be redeemed plus accrued and unpaid
interest, if any, to, but excluding, the redemption date.
In addition, the Company may redeem all, but not part, of the Notes upon the
occurrence of specified tax events set forth in the Indenture.
The Indenture provides for customary events of default (subject in certain cases
to customary grace and cure periods), which include nonpayment, breach of
covenants in the Indenture, payment defaults or acceleration of other
indebtedness and certain events of bankruptcy and insolvency. If an event of
default with respect to the Notes occurs and is continuing, the Trustee or
holders of at least 25% in principal amount of the Notes may declare the
principal and the accrued and unpaid interest, if any, due and payable. These
events of default are subject to a number of important qualifications,
limitations and exceptions that are described in the Indenture.
The Notes were offered and sold in a private offering that was exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"). The Notes were offered within the United States only to
persons reasonably believed to be qualified institutional buyers in accordance
with Rule 144A under the Securities Act and outside the United States only to
non-U.S. investors in accordance with Regulation S under the Securities Act. The
Notes have not been registered under the Securities Act or the securities laws
of any other jurisdiction. Unless so registered, the Notes may not be offered or
sold in the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and applicable state securities laws.
The Indenture is filed as Exhibit 4.1 to this Current Report on Form 8-K and are
incorporated herein by reference. The above descriptions of the material terms
of the Indentures and Notes are qualified in their entirety by reference to such
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is incorporated into this Item
2.03 by reference.
Item 8.01 Other Events.
On January 7, 2022, the Company issued a press release announcing the completion
of a private placement of the Notes. A copy of the press release is attached
hereto as Exhibit 99.1 and is incorporated by reference herein.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this Current Report on Form 8-K relating to, among other
things, our future performance estimates, forecasts and projections constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to, statements regarding
revenues, costs and financial results for 2021 and beyond. Words such as
"anticipate," "believe," "could," "driving," "estimate," "expect," "goal,"
"intend," "may," "plan," "project," "seek," "should," "will," "would,"
"considering," and similar expressions are intended to help identify
forward-looking statements. Forward-looking statements reflect management's
current expectations, are based on judgments, are inherently uncertain and are
subject to risks, uncertainties and other factors, which could cause our actual
results, performance or achievements to differ materially from the future
results, performance or achievements expressed or implied in those
forward-looking statements. Examples of these risks, uncertainties and other
factors include, but are not limited to, the impact of COVID-19 and other
contagious illnesses on economic conditions, industries and societies generally,
the travel industry and the financial position and operating results of our
Company; required or voluntary travel restrictions, including potential
suspensions of cruises; guest cancellations; the pace and effectiveness of our
return to service; our ability to satisfy the Framework for the Conditional
Sailing Order issued by the U.S. Centers for Disease Control and Prevention
("the CDC"); the impact on our business of current or any future CDC guidance;
the impact of state regulation and litigation regarding proof of passenger
vaccination; our ability to obtain sufficient financing, capital or revenues to
satisfy liquidity needs, capital expenditures, debt repayments and other
financing needs; the effectiveness of the actions we have taken to improve and
address our liquidity needs; the impact of the economic and geopolitical
environment on key aspects of our business, such as the demand for cruises,
passenger spending and operating costs; supply chain disruptions; incidents or
adverse publicity concerning our ships, port facilities, land destinations
and/or passengers or the cruise vacation industry in general; concerns over
safety, health and security of guests and crew; the cost and effectiveness of
our safety protocols relating to COVID-19; impairments of our goodwill,
long-lived assets, equity investments and notes receivable; difficulties
sourcing crew, provisions and supplies; the occurrence of COVID-19 and other
contagious diseases on our ships and concerns about the risk of illness when
traveling to, on or from our ships; unavailability of ports of call; growing
anti-tourism sentiments and environmental concerns; changes in U.S. foreign
travel policy; uncertainties relating to conducting business internationally and
expanding into new markets and new ventures; our ability to recruit, develop and
retain high quality personnel; changes in operating and financing costs; the
impact of our current and future indebtedness; the impact of foreign currency
exchange rates, inflation and interest rate and fuel price fluctuations; labor
shortages; the impact of conversions of our convertible notes, if any, in shares
of our common stock or a combination of cash and shares of our common stock; our
expectation that we will not declare or pay dividends on our common stock for
the foreseeable future; vacation industry competition and changes in industry
capacity and overcapacity; the risks and costs related to cyber security
attacks, data breaches, protecting our systems and maintaining data security and
integrity, as well as personal data of our guests, employees and others; the
impact of new or changing legislation and regulations or governmental orders on
our business; pending or threatened litigation, investigations and enforcement
actions; the effects of weather, natural disasters and seasonality on our
business; emergency ship repairs, including the related lost revenue; the impact
of issues at shipyards, including ship delivery delays, ship cancellations or
ship construction cost increases; shipyard unavailability; the unavailability or
cost of air service; and uncertainties of a foreign legal system as we are not
incorporated in the United States.
In addition, many of these risks and uncertainties are heightened and will
continue to be heightened, or in the future may be heightened, by the COVID-19
pandemic. It is not possible to predict or identify all such risks.
The forward-looking statements included in this Current Report on Form 8-K speak
only as of the date of this Current Report on Form 8-K. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. Except as required by law, we undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. You should consider
the areas of risk described above, as well as those set forth under the headings
"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31,
2020 and our Quarterly Report on Form 10-Q for the quarter ended September 30,
2021, copies of which may be obtained by visiting our Investor Relations website
at www.rclinvestor.com or the SEC's website at www.sec.gov.
Item 9.01 Financial Statements and Exhibits.
Exhibit Indenture, dated January 7, 2022, among the Company and The Bank
4.1 of New York Mellon Trust Company, N.A., as trustee, principal
paying agent, transfer agent and registrar.
99.1 Press Release
Exhibit Cover Page Interactive Data File (embedded within the Inline XBRL
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