Item 1.01 Entry into a Material Definitive Agreement.
On October 6, 2022, Royal Caribbean Cruises Ltd. (the "Company") completed its
previously announced concurrent private offerings of $1.0 billion aggregate
principal amount of 9.250% senior guaranteed notes due 2029 (the "Senior
Guaranteed Notes") and $1.0 billion aggregate principal amount of 8.250% senior
secured notes due 2029 (the "Senior Secured Notes," and, together with the
Senior Guaranteed Notes, the "Notes"). The Company received combined net
proceeds from the offerings of approximately $1.984 billion (after deducting
fees, commissions and expenses), which it is using, together with cash on hand,
to fund the redemption (including any associated fees and expenses) of all of
its outstanding 9.125% priority guaranteed notes due 2023 and 10.875% senior
secured notes due 2023, each in the aggregate principal amount of $1.0 billion
(collectively, the "Redeemed Notes").
The Senior Guaranteed Notes were issued by the Company pursuant to an indenture,
dated October 6, 2022 (the "Senior Guaranteed Indenture"), among the Company,
RCI Holdings LLC, a direct wholly-owned subsidiary of the Company ("RCI
Holdings"), and The Bank of New York Mellon Trust Company, N.A., as trustee. The
Senior Secured Notes were issued by the Company pursuant to an indenture, dated
October 6, 2022 (the "Senior Secured Indenture" and, together with the Senior
Guaranteed Indenture, the "Indentures"), among the Company, the guarantors named
therein, and The Bank of New York Mellon Trust Company, N.A., as trustee and
security agent.
Interest on the Notes accrues from October 6, 2022 and will be payable
semi-annually in arrears on January 15 and July 15 of each year, beginning on
July 15, 2023, at a rate of 9.250% per year, in the case of the Senior
Guaranteed Notes, and 8.250% per year, in the case of the Senior Secured Notes.
Each series of Notes will mature on January 15, 2029, unless earlier redeemed or
repurchased.
The Senior Guaranteed Notes will be guaranteed fully and unconditionally on a
senior unsecured basis by RCI Holdings, which owns 100% of the equity interests
in the Company's subsidiaries that own the following vessels: Symphony of the
Seas, Oasis of the Seas, Harmony of the Seas, Spectrum of the Seas, Quantum of
the Seas, Ovation of the Seas and Anthem of the Seas.
The Senior Secured Notes will be fully and unconditionally guaranteed on a
senior secured basis by Celebrity Cruises Holdings Inc., Celebrity Cruises Inc.
and certain of the Company's wholly-owned vessel-owning subsidiaries. The Senior
Secured Notes and the related guarantees will be secured by first-priority
security interests in the collateral (which generally includes certain of the
Company's material intellectual property, including rights in certain of the
Company's marketing databases, customer data and customer lists, a pledge of
100% of the equity interests of certain of the Company's wholly-owned
vessel-owning subsidiaries, the collateral account established in connection
with the Company's existing 11.500% Senior Secured Notes due 2025 (the "2025
Secured Notes"), mortgages on each of the 26 vessels owned by such subsidiaries
and an assignment of insurance and earnings in respect of such vessels, subject
to permitted liens and certain exclusions and release provisions). Pursuant to
the terms of the Senior Secured Indenture, the obligations under the Senior
Secured Notes and the related guarantees will be secured by the collateral in an
amount not to exceed the difference between $1.662 billion less amounts payable
with respect to the 2025 Senior Secured Notes (provided that in no event shall
the amount of obligations under the Senior Secured Notes and the related
guarantees secured by the collateral exceed $270 million).
The Company may, at its option, redeem, at any time and from time to time prior
to April 1, 2025, some or all of each series of Notes at a redemption price
equal to 100% of the principal amount thereof plus accrued and unpaid interest,
if any, to, but excluding, the date of redemption plus a "make-whole premium"
described in the applicable Indenture. During the twelve month-periods beginning
on April 1, 2025, April 1, 2026 and April 1, 2027 and thereafter, the
Companymay, at its option, redeem, at any time and from time to time, some or
all of each series of Notes at redemptions prices listed in the applicable
Indenture, plus, in each case, accrued and unpaid interest, if any, to, but
excluding, the date of redemption. In addition, at any time and from time to
time prior to April 1, 2025, the Company may, at its option, redeem up to 40% of
the aggregate principal amount of each series of Notes with the proceeds from
certain equity offerings at the redemption prices listed in the applicable
Indenture. The Company may also redeem all, but not part, of each series of
Notes upon the occurrence of specified tax events set forth in the applicable
Indenture.
2
The Indentures contains covenants that limit the ability of the Company and/or
certain of its subsidiaries to, among other things: (i) incur or guarantee
certain additional indebtedness; (ii) consummate certain asset sales;
(iii) create or assume certain liens; and (iv) consolidate, merge or transfer
all or substantially all of their assets. In addition, upon the occurrence of
specified change of control triggering events, the Company may be required to
offer to repurchase the Notes at a repurchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to, but
excluding, the repurchase date. The Indentures also contains customary events of
default.
The Notes and related guarantees 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 and the related guarantees
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 and the related guarantees have
not been registered under the Securities Act or the securities laws of any other
jurisdiction. Unless so registered, the Notes and the related guarantee 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 Indentures (which include the applicable form of Notes) are filed as
Exhibit 4.1, and 4.2 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
exhibits.
Perella Weinberg Partners served as the Company's independent financial advisor
in connection with this transaction.
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 October 6, 2022, the Company issued a press release announcing the completion
of the concurrent private offerings of the Notes. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit 4.1 Indenture, dated October 6, 2022, among the Company, RCI Holdings
and The Bank of New York Mellon Trust Company, N.A., as trustee.
Exhibit 4.2 Indenture, dated October 6, 2022, among the Company, the
guarantors named therein and The Bank of New York Mellon Trust
Company, N.A., as trustee and security agent.
Exhibit 99.1 Press Release dated October 6, 2022.
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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ROYAL CARIBBEAN GROUP 
