RCL Stock

[Jimbo]

Testing a Vaccine already started back on March 16th in Seattle.

https://www.aol.com/article/lifestyle/2020/03/30/who-can-get-a-coronavirus-test/23965796/#slide=7671505#fullscreen

 

After it opens click  Show Captions

 

Question is  how long does it take for the results?

Edited April 2, 2020 by Jimbo

[frank808]

 
Well, considering the stock analysts have told us that CCL has the best balance sheet, then it does not look so good, and this soon in the process, as you said!

I think NCLH has the best balance sheet of the 3 (CCL, NCLH & RCL) in terms of reserves and cash burn.

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[The_Big_M]

11 hours ago, Ourusualbeach said:

China could resume sailing shortly.

 

https://www.cruiseindustrynews.com/cruise-news/22699-chinese-cruise-industry-could-start-up-first.html

 

Don't see that happening with international destinations from them locked off for a while. Japan just added a ban on Chinda today!

 

They could do their internal Yangtse cruises though.

[The_Big_M]

8 hours ago, ed01106 said:

As long as a negative test means that you aren’t contagious than it is workable.  Just test daily, isolate anyone contagious.

 

We do that for a week or so and the disease will be virtually eliminated.

 

And which test does that? Latest research is you are contagious 2 days before symptoms - if you have any at all (asymptomatic)

 

The quick tests are only testing if you have antibodies i.e. had the virus for at least 5 days or had it in the past.

[Blizzard54]

2 hours ago, Jimbo said:

Testing a Vaccine already started back on March 16th in Seattle.

https://www.aol.com/article/lifestyle/2020/03/30/who-can-get-a-coronavirus-test/23965796/#slide=7671505#fullscreen

 

After it opens click  Show Captions

 

Question is  how long does it take for the results?

The first round of testing is 6 weeks.  I believe round 2 is 4 to 6 months.

[Biker19]

1 minute ago, irzero said:

These companies need to tell the market how much cash they burn each month.

Analyst sorta figured that out:

 

The $1bn per month liquidity requirements include $200m to $300m in ongoing operating costs associated with the majority of the company's ships in prolonged lay-up. The cost is about $1m per ship per month versus warm ship lay-up costs of $2m to $3m per ship per month.

[zekekelso]

2 hours ago, irzero said:

CCL only sold 500m of 1.25bln in shares. But now has 4bln from 11.5% bond. Expensive loan that is.
 

Their current situation is no money coming in and lots and lots of expenses. Hard to borrow money with a story like that. 

[nolimits]

Royal already borrowed enough with 2nd loan guaranteed next year   

article posted earlier

[Jimbo]

How about anchoring all the ships and turn everything off and take all the crew off for 6 months?

 

Got to be cheaper then continuing to sail them back and forth to port for supplies.

 

[Biker19]

1 hour ago, Jimbo said:

How about anchoring all the ships and turn everything off and take all the crew off for 6 months?

They won't/can't do that but there are long term lay up options which would cut expenses. @chengkp75 may have some info.

[npcl]

11 minutes ago, irzero said:

Not really. They had 17 billion offered on a 3 billion bond.

Everyone wanted the secured debt but nobody wanted the shares.

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How ever CCL had to pay junk bond rates of 11.5% Coupon actual after slight discount 12% for the 4 billion it took (these bonds were senior secured notes with the collateral being ships and intellectual property). Considering that existing bonds are trading around 9%, the buyers of those notes should be able to flip them quickly for a nice profit. CCL really couldn't take more because that 4 billion will cost it $480 million per year in interest and borrowing any more would risk breaking covenants on existing debt. 

 

Even with that 4 billion CCL also sold convertible notes with 5.75% coupon that can be converted to shares of stock at 100 shares per $1000 in bond value. Convertibles tend to make for interesting arbitrage action if the stock were to raise above conversion price that functions to hold the share price down.

 

CCL also sold 62.5 million shares of stock at $8 dollars a share to raise another $500 million.

 

All in all very very expensive money.  They would not pay those rates and issue more stock at $8 if they had any other choice.

 

Bottom line it indicates that the commercial borrowing market is pretty well closed for the cruise lines.  forcing them to go to the high yield (Junk Bond) route.

Edited April 2, 2020 by npcl

[bigeck]

Posted on another thread

 

Royal just announced that they just ran out of money, and are going to try to raise some. They went thru 3.6 billion dollars they had access to. Hopefully they can get some or bankrupt is an issue.  That was the news bleep released from Royal this morning after 10:00.
 

statement;;;  

Royal Caribbean has emptied its revolving credit coffers as the struggling cruise industry scrambles for cash in a bid to avoid bankruptcy amid the coronavirus pandemic.

 

Royal Caribbean has fully drawn down two of its revolving credit lines as the struggling cruise industry scrambles to stay in business while the coronavirus pandemic leaves ships empty and moored at docks across the world, the company said in a new securities filing.

The company tapped $3.48 billion in backup financing between two revolving lines held by Nordea Bank and Scotiabank, Royal Caribbean said Thursday in a filing.

 

[sfaaa]

In a survival mode, you take whatever is offered to you and hope like hell you will eventually come out of this mess somewhat intact. There is simply no Plan B for cruise lines given they are not part of the bailout package.

[Baron Barracuda]

1 hour ago, bigeck said:

Posted on another thread

 

Royal just announced that they just ran out of money, and are going to try to raise some. They went thru 3.6 billion dollars they had access to. Hopefully they can get some or bankrupt is an issue.  That was the news bleep released from Royal this morning after 10:00.
 

statement;;;  

Royal Caribbean has emptied its revolving credit coffers as the struggling cruise industry scrambles for cash in a bid to avoid bankruptcy amid the coronavirus pandemic.

 

Royal Caribbean has fully drawn down two of its revolving credit lines as the struggling cruise industry scrambles to stay in business while the coronavirus pandemic leaves ships empty and moored at docks across the world, the company said in a new securities filing.

The company tapped $3.48 billion in backup financing between two revolving lines held by Nordea Bank and Scotiabank, Royal Caribbean said Thursday in a filing.

 

This means nothing.  Royal just drew against their lines of credit and are holding onto the cash.  Protects them in case lenders reconsider  and try to cancel.

[Baron Barracuda]

1 hour ago, irzero said:

Not really. They had 17 billion offered on a 3 billion bond.

Everyone wanted the secured debt but nobody wanted the shares.

Sent from my SM-N975F using Tapatalk
 

 

The final mix ended up more bonds / less stock.  Wonder whether strong investor interest in the bonds allowed them to sell less stock or lack of appetite for the stock forced them to issue more bonds thereby driving up the yield.  Still rather pay 11.5% on straight debt than sell stock at $8.  Even the convert was a better deal for them with conversion price of $10.  Would have been better off selling more convert and no stock.      

 

[Hoopster95]

4 hours ago, npcl said:

Bottom line it indicates that the commercial borrowing market is pretty well closed for the cruise lines.

 

3 hours ago, Baron Barracuda said:

Royal just drew against their lines of credit and are holding onto the cash.  Protects them in case lenders reconsider  and try to cancel.

 

2 hours ago, Baron Barracuda said:

The final mix ended up more bonds / less stock. 

 

Guys, your opinions please.... is the company in trouble? Is the stock price in trouble?

Btw, I'm not buying , just curious.

[yogimax]

15 minutes ago, Hoopster95 said:

 

 

 

Guys, your opinions please.... is the company in trouble? Is the stock price in trouble?

Btw, I'm not buying , just curious.

Yes

[The_Big_M]

It's not in trouble right now.

 

The issue is the uncertainty about the length of time to when operations can resume (and how when they do start up). They have funding for a certain period but if it extends to the longer end, that is when they will be in some form of trouble. 

[Hoopster95]

Thx Yogi and Big-M. I've already posted basics like this on this thread already in previous pages. I too think they're in trouble depending on the time. I'm looking for a more technical response by the other guys that seem to have trading savvy... maybe you give me a more technical answer?

[zekekelso]

1 hour ago, Hoopster95 said:

 

 

 

Guys, your opinions please.... is the company in trouble? Is the stock price in trouble?

Btw, I'm not buying , just curious.

Before Covid, RCL was a very well managed company doing something very few companies can do: it was both growing and making profits hand over fist. Usually even a good company can only do one or the other at a time. 
 

If cruising is back up and running in 6-12 months, RCL will be fine. If it takes 12-18 months, the company will likely go through some painful restructuring that will hurt shareholders and bond holders, but not us customers so much. 
 

The big worry is if things take many years or even never come back to where it was. What if people don’t want to cruise, ports don’t want the ships, governments start to regulate the heck out of cruising. Then the company is in heap big trouble. 

[Ocean Boy]

Stock isn't looking pretty today. Though the trend is certainly not confined to RCL.

[Blizzard54]

1 hour ago, Ocean Boy said:

Stock isn't looking pretty today. Though the trend is certainly not confined to RCL.

I do not see what sort of news could possibly help the stock over the next few months.  I expect it will yo-yo around 20-30 at least until they start sailing.  That could shift to a lower range. 

[zekekelso]

22 hours ago, Jimbo said:

How about anchoring all the ships and turn everything off and take all the crew off for 6 months?

 

 

 

Somebody might steal it. Though hiding an Oasis class ship might be tricky. 

[npcl]

15 hours ago, Hoopster95 said:

Thx Yogi and Big-M. I've already posted basics like this on this thread already in previous pages. I too think they're in trouble depending on the time. I'm looking for a more technical response by the other guys that seem to have trading savvy... maybe you give me a more technical answer?

To look at how the market looks at companies and their odds of default I tend to look at the bond market.  

 

For Royal Caribbean

 

11/28/20  2.65% bonds   now trading at 16.058% YTM

11/15/22  5.25% bonds  now trading at 21.705% YTM

3/15/2028  3.7% bonds now trading at 11.517% YTM

 

For Carnival

 

10/15/20  3.95% bonds now trading at 15.901% YTM

10/01/23  7.2%  bonds now trading at 10.779%  YTM

 

These are certainly at Junk bond levels.  The only other companies whose bonds are trading near Royal's 11/15/22 value are small oil companies that are certainly at risk.

 

I would say that Royal is certainly at risk and will need to find some way to raise money in the near future, if they can.

 

CCL seems to have stabilized at some degree with their recent, very expensive, money raise.

[npcl]

51 minutes ago, Blizzard54 said:

I do not see what sort of news could possibly help the stock over the next few months.  I expect it will yo-yo around 20-30 at least until they start sailing.  That could shift to a lower range. 

Technical analysis indicates that its next support levels at 22.35 and if it breaks through that the next support is all the way back to 2009 at around 10.