RCL Stock

[Biker19]

Royal Caribbean Group got an additional 12-month deferral of debt payments for 14 of its ships built in Germany and France

 

The company was able to amend loans backed by Hermes, Germany's export-credit agency, to finance Celebrity Eclipse, Celebrity Equinox, Celebrity Reflection, Celebrity Silhouette, Odyssey of the Seas, Celebrity Solstice, Spectrum of the Seas, Anthem of the Seas and Quantum of the Seas.

These will allow Royal Caribbean to defer approximately $570m of principal amortization payments due between April 2021 and March 2022.

 

In another amended Hermes-backed loan related to Ovation of the Seas, the company may defer approximately $90m of principal amortization payments due between May 2021 and April 2022.

BpiFAE amendments

Further loan amendments were agreed with BpiFrance Assurance Export related to loans for Celebrity Edge, Celebrity Apex and Harmony of the Seas, all built in France.

 

With these, Royal Caribbean may defer approximately $265m of principal amortization payments due between April 2021 and March 2022 for an additional 12 months.

 

And an amended BpiFAE-backed loan for Symphony of the Seas allows the company to defer for 12 more months approximately $125m of principal amortization payments due between April 2021 and March 2022.

Follows other loan amendments

These changes closely follow other amended loan facilities with three banks and with Finland's export-credit agency, Finnvera, related to three Icon-class ships.

 

https://www.seatrade-cruise.com/finance/royal-caribbean-gets-105bn-debt-holiday-14-ships

[Ocean Boy]

That all makes sense and is good for all parties involved. It would do no good to not defer payments. Even though a cruise ship may be worth a billion dollars it pretty much has zero value to anyone other than a cruise line. So it is beneficial to everyone involved to help the cruise lines get through this period of time.

[radarcruiser]

Sitting here SMH at the continued rise in the stock price over the past week.  Sold 90 calls at 82.  May get sold out, but I guess I'm ok with that.  Just can't see any fundamental reason this is a 94.00 stock with no visible path to earnings again.

 

[yogimax]

8 hours ago, Biker19 said:

Royal Caribbean Group got an additional 12-month deferral of debt payments for 14 of its ships built in Germany and France

 

Usually, in situations like this, there is a price to be paid for deferring loan payments.  For example, did RCL have to agree to a higher interest rate to get the extension?  I don't know.  Does anyone have  answer?

[yogimax]

3 minutes ago, radarcruiser said:

Sitting here SMH at the continued rise in the stock price over the past week.  Sold 90 calls at 82.  May get sold out, but I guess I'm ok with that.  Just can't see any fundamental reason this is a 94.00 stock with no visible path to earnings again.

 

Agree, but this stock market has become counter intuitive.  The market is also forward looking.  Right now, the bets are on successful mass vaccination and return to "almost normal."   The problem may come when "almost normal" is reached and folks begin to look ahead to what will certainly be dismal earnings and profitability.

[DCGuy64]

10 minutes ago, radarcruiser said:

Sitting here SMH at the continued rise in the stock price over the past week.  Sold 90 calls at 82.  May get sold out, but I guess I'm ok with that.  Just can't see any fundamental reason this is a 94.00 stock with no visible path to earnings again.

 

No visible path? Maybe I'm imagining things, but last year I recall people saying that a vaccine would signal a return to normal pretty soon. Since vaccinations are underway, that would seem like a visible path, would it not?

[A&L_Ont]

2 minutes ago, yogimax said:

Usually, in situations like this, there is a price to be paid for deferring loan payments.  For example, did RCL have to agree to a higher interest rate to get the extension?  I don't know.  Does anyone have  answer?

 

Who knows, and does it really matter in the big picture to the "cruisers" on the street.  People will either being sailing on this ship in a year, or cruises will no longer exist. IMO, the fact that interest rates might be higher a year from now is the least of RC concerns at this moment in time.  

 

Hope floats and that's what they are basing their future on.

 

[radarcruiser]

4 minutes ago, DCGuy64 said:

No visible path? Maybe I'm imagining things, but last year I recall people saying that a vaccine would signal a return to normal pretty soon. Since vaccinations are underway, that would seem like a visible path, would it not?

They are a long way from normal operations.  When they finally get some relief from CDC, it will be with much reduced capacity and lots of extra costs.  Add on the issues with getting approval for port calls in hundreds of locations, if there is a visible path to profitability, its at least a year or two away.  That's not even considering higher debt service costs.

[DCGuy64]

1 minute ago, radarcruiser said:

They are a long way from normal operations.  When they finally get some relief from CDC, it will be with much reduced capacity and lots of extra costs.  Add on the issues with getting approval for port calls in hundreds of locations, if there is a visible path to profitability, its at least a year or two away.  That's not even considering higher debt service costs.

Only time will tell, but I think the "at least a year or two away" prognostication is unrealistically pessimistic. (but who knows? you might be right) At the very least, people who helped RCCL's surging stock price this week disagree with you.

 

[latserrof]

9 minutes ago, DCGuy64 said:

 At the very least, people who helped RCCL's surging stock price this week disagree with you.

 

Not necessarily. They are not betting on RCL's return to profitability, but on whether someone else will pay more for the stock than they did. Maybe some optimist like you?

Edited February 24, 2021 by latserrof

[DCGuy64]

9 minutes ago, latserrof said:

Not necessarily. They are not betting on RCL's return to profitability, but on whether someone else will pay more for the stock than they did. Maybe some optimist like you?

I'm not optimistic about the short term of cruising, somewhat more hopeful for the long term, though.

 

[firefly333]

23 minutes ago, latserrof said:

Not necessarily. They are not betting on RCL's return to profitability, but on whether someone else will pay more for the stock than they did. Maybe some optimist like you?

FBN said people are buying rcl because fain said bookings are up 30%. They leave off up 30% from what. I'm betting the traders dont know how long it will be before cruising resumes or that every ship has to be inspected..its a momentum stock, in play short term. Doesnt have anything to do with a long term investment.  With no earnings, as in its posting a loss, no pe to compare. Many stocks posting losses are hard to evaluate long term. 

 

Stock traders love it today. 

[Ethanol95]

I never thought it would hit this high this quickly. Pretty spontaneous and a significant drop would likely follow once the run ends. Bought at 70.50 and sold at 96.00. It is very volatile indeed.

[Wahed]

I bought at 19.78. And the bottom was 19.25.  I managed to do OK.

 

TO THE MOON

DIAMOND HANDS

[dwp10mm]

I sold 50 shares at $88 this week.  Wanted to get my initial investment back.  I'll now hold the remaining 150 shares until/unless it makes sense to exit that as well.  Playing with house money now.

[Biker19]

RCCL posted its annual report, it has some interesting tidbits:

 

Inline XBRL Viewer (sec.gov)

[Ocean Boy]

Good Lord, there has to be Cliff Notes somewhere.

[atgood]

12 minutes ago, Ocean Boy said:

Good Lord, there has to be Cliff Notes somewhere.

What I think it says.  

Still burning through lots of cash every month. 
Still have lots of cash on hand.
Ship builds still in process with delayed delivery dates. 

Lots of demand for cruising.

No definitive date for return to cruising in the USA just yet. 

[Biker19]

36 minutes ago, Ocean Boy said:

Good Lord, there has to be Cliff Notes somewhere.

For that just read the news that came out a couple of days ago - for little things, like the estimated delay for Icon, or the %interest RCCL pays, or other minute detail you may find interesting, you'll have to wade through the report.

 

Biker, who was interested to see that RCCL is being PC, by listing the demographics of its staff for the first time.

Edited February 27, 2021 by Biker19

[Ocean Boy]

22 minutes ago, atgood said:

What I think it says.  

Still burning through lots of cash every month. 
Still have lots of cash on hand.
Ship builds still in process with delayed delivery dates. 

Lots of demand for cruising.

No definitive date for return to cruising in the USA just yet. 

Thank you. I wonder what sectors the demand for cruises is from? Is it coming from FCCs from cancelled cruises, seasoned cruisers, new cruisers? I would think that would make a difference.

[Biker19]

1 minute ago, Ocean Boy said:

 I wonder what sectors the demand for cruises is from? Is it coming from FCCs from cancelled cruises, seasoned cruisers, new cruisers? I would think that would make a difference.

That won't be listed.

[atgood]

5 minutes ago, Ocean Boy said:

Thank you. I wonder what sectors the demand for cruises is from? Is it coming from FCCs from cancelled cruises, seasoned cruisers, new cruisers? I would think that would make a difference.

Good questions.  I thought I saw Fain talked about the high demand was surprisingly from the 65+ crowd.  I don’t recall where I saw the video. 
 

Edited February 27, 2021 by atgood

[yknot13]

As long as Bookings continue and stock is purchased wildly, they will have cash on hand.

In the meantime.... it is a non-viable business model, great speculation being created on future cruise demand with no guarantees to fuel the demand to buy stock .

Underlying Message "SELL NOW" before it's to late.

[soremekun]

I was hoping to find the sale price of Majesty and Empress.

[notmyrealnameoremail]

2 hours ago, yknot13 said:

As long as Bookings continue and stock is purchased wildly, they will have cash on hand.

In the meantime.... it is a non-viable business model, great speculation being created on future cruise demand with no guarantees to fuel the demand to buy stock .

Underlying Message "SELL NOW" before it's to late.

Please explain why you think Royal has a non-viable business model?

 

Would I be correct to think you have shorted Royal stock since they have a non-viable business model?

 

I'm curious, what companies do you think have guarantees of future demand?

 

Disclosure:  We are holding a small number of shares of Royal and are happy to consider doing so.

 

Tom