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On 8/4/2022 at 5:58 PM, AlohaLivin said:


In my view, investing is sometimes a science and sometimes an art. Our increased cruise line investments  have been more the latter. The last time I did that I purchased Square during the initial offering period since I used in my private health practice and loved it - thankfully that was a wonderful investment.  At age 62 now we moved 2 years ago to a more conservative portfolio, but I have some funds that I continue to use for “gut” purchases, Time will tell. 

 

Yep, good thoughts.

 

There is something interesting about the RCL recent $1.15B ($900M+$150M), first being the $150M optional additional amount (green shoe) was tendered.

 

So, it makes sense to look at the debt structures and players.  Morgan Stanley and Bank of America executed the current deal.  They, along with RCL, refinanced 60% or so of two outstanding issuances that were due in 2023.  That % prevents certain tendering rules and also allows the institutional investors (primarily hedge funds) to essentially roll over the hedges.

 

Question ~ why couldn't NCL and CCL do this, especially CCL that just directly diluted equity with new shares?

 

Analysts Answer ~ Per the IFR article ~ Morgan Stanley has agreed to backstop the sale of $3.15B of new debt in 2023.  That will allow RCL to wait for better bond market conditions, i.e., rates.

 

https://www.ifre.com/story/3466616/cruise-control-royal-caribbean-navigates-choppy-cb-markets-hnc8dkg5xr

 

So, it appears that RCL has a life preserver available from Morgan Stanley through 2023, at least in regards to handling expected maturities of long-term debt.

 

 

 

 

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I know this is the RCL forum, but all three cruise companies have been trading in sync and their quarterlies have more in common than different. NCL released Q2 this morning. Quick summary:

 

-They missed all their targets.

-Added another 500 million in debt

-Expect to add more debt is Q3

 

It has been reported that ships need 95% occupancy to turn actual profit. I don't know how NCL can turn this ship around until their occupancy levels rise. Occupancy was a dismal 65% in second quarter and they HOPE to get to 80% in third quarter. 

 

image.thumb.png.95e5cdefdba034297e81ee573080e85c.png

 

 

The conference call happens at 10a.m. I suspect there will be more information given then about the removal of all vaccine requirements. 

 

https://www.globenewswire.com/news-release/2022/08/09/2494757/24500/en/Norwegian-Cruise-Line-Holdings-Reports-Second-Quarter-2022-Financial-Results.html

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Niece and friends just off the NCL Joy.  Very hard to make dinner reservations despite mdr being only 1/2 full.  2 1/2 hours for dinner.  Brother had similar situation last month on Freedom.  Obviously severely short staffed.   NCL only projecting 80% loads next qtr held down by staffing.   All cruise lines in same situation to varying degrees.  Needs to be resolved before they can start making money.

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5 hours ago, BermudaBound2014 said:

I know this is the RCL forum, but all three cruise companies have been trading in sync and their quarterlies have more in common than different. NCL released Q2 this morning. Quick summary:

 

-They missed all their targets.

-Added another 500 million in debt

-Expect to add more debt is Q3

 

It has been reported that ships need 95% occupancy to turn actual profit. I don't know how NCL can turn this ship around until their occupancy levels rise. Occupancy was a dismal 65% in second quarter and they HOPE to get to 80% in third quarter. 

 

image.thumb.png.95e5cdefdba034297e81ee573080e85c.png

 

 

The conference call happens at 10a.m. I suspect there will be more information given then about the removal of all vaccine requirements. 

 

https://www.globenewswire.com/news-release/2022/08/09/2494757/24500/en/Norwegian-Cruise-Line-Holdings-Reports-Second-Quarter-2022-Financial-Results.html

Yes, I own shares in all three companies and the price per share was down again overnight. I bought low so I am not overly concerned at this point.

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On 8/9/2022 at 11:00 PM, BermudaBound2014 said:

 

It has been reported that ships need 95% occupancy to turn actual profit. I don't know how NCL can turn this ship around until their occupancy levels rise. Occupancy was a dismal 65% in second quarter and they HOPE to get to 80% in third quarter. 

 

 

This quarter covered both start-up and initial sailings, plus capacity constraints due to covid. These sailings could not be 100% capacity just due to reality. In spite of that when it's known it wouldn't be 100, 65% overall was achieved, and it notes that some sailings were at 100%. In line with expectations.

 

As those issues have passed and the previous target was met, I don't see any reason to doubt the 80% target.

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4 minutes ago, The_Big_M said:

As those issues have passed and the previous target was met, I don't see any reason to doubt the 80% target.

 

I'm not doubting their target, I'm just noting that with occupancy levels this low; at some point the piper is going to come calling. Just how long they can they hold out? 

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5 hours ago, exm said:

Is NCL allowing unvaxed kids under 12 to sail?

 

Just a FYI, Announced today (Aug 10), RCL and Celebrity are allowing unvaccinated cruisers also. They don't seem quite as broadly opened as NCL but still plenty of cruises to choose from if you are looking for a cruise that welcomes the Unvaccinated.

 

image.png.b796f4a03d57ef283fe67d39be09e275.png

 

https://www.cruiseindustrynews.com/cruise-news/28030-royal-caribbean-dropping-vaccine-requirements-for-select-cruises.html

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11 hours ago, BermudaBound2014 said:

 

Beginning Sept 3, NCL allows ALL unvaccinated people to sail regardless of age. 

 

 

 

BB

 

Remember when all of the rage was NCL, through their valiant opposition to FL prohibition to require documentation of vaccination, was for the good health and safety of their passengers, was bloviated by FDR repeatedly as 'the business plan' and such was lauded here? 

 

And that all of that testing of vaccinated passengers and the draconian lockdowns if testing positive on board 'for the good of everyone' was "so good, so good" don't you know?  😉

 

So, that business model, once hailed, is now the polar opposite, and is conveniently now hailed.  🙃 

 

There has been no change in the science. 😷

 

Hmmm.  😲

 

image.jpeg.13edbde2a3f199b8a2ea679a6146716a.jpeg

 

 

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8 hours ago, At Sea At Peace said:

 

BB

 

Remember when all of the rage was NCL, through their valiant opposition to FL prohibition to require documentation of vaccination, was for the good health and safety of their passengers, was bloviated by FDR repeatedly as 'the business plan' and such was lauded here? 

 

And that all of that testing of vaccinated passengers and the draconian lockdowns if testing positive on board 'for the good of everyone' was "so good, so good" don't you know?  😉

 

So, that business model, once hailed, is now the polar opposite, and is conveniently now hailed.  🙃 

 

There has been no change in the science. 😷

 

Hmmm.  😲

 

image.jpeg.13edbde2a3f199b8a2ea679a6146716a.jpeg

 

 

 

Well...Oh my. 

 

We are all one big happy and healthy population again ('relatively).  🙃

 

"I expect the CDC to scale back Covid restrictions for quarantining"

 

the CDC relaxed its COVID-19 guidelines, "dropping the recommendation that Americans quarantine themselves if they come into close contact with an infected person."  

 

the CDC says that "to limit social and economic impacts, quarantine of exposed persons is no longer recommended, regardless of vaccination status." 

 

"spacing footage"

 

"The Centers for Disease Control and Prevention also said people no longer need to stay at least 6 feet away from others"
 

"school and work protocols"

 

"The CDC recommendations apply to everyone in the U.S., but the changes could be particularly important for schools, which resume classes this month in many parts of the country.

 

Perhaps the biggest education-related change is the end of the recommendation that schools do routine daily testing, although that practice can be reinstated in certain situations during a surge in infections, officials said.

 

The CDC also dropped a “test-to-stay” recommendation, which said students exposed to COVID-19 could regularly test — instead of quarantining at home — to keep attending school. With no quarantine recommendation anymore, the testing option disappeared too."


😇

 

 

 

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MIAMI  August 15, 2022 – Royal Caribbean Group (NYSE: RCL) (the “Company”) today announced that it has commenced a private offering of $1,000,000,000 aggregate principal amount of senior unsecured notes due 2027 (the “Notes”).

 

The Company intends to use the proceeds from the sale of the Notes to repay principal payments on debt maturing in 2022 and/or 2023 (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.

 

Nothing contained herein shall constitute an offer to sell or the solicitation of an offer to buy any security. The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States, only to certain non-U.S. investors pursuant to Regulation S. The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.

 

https://www.sec.gov/Archives/edgar/data/884887/000110465922090700/tm2223435d1_ex99-1.htm

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Royal Caribbean Group priced its private offering of $1.25b of 11.625% senior unsecured notes due 2027.

The offering was upsized from $1b.
 

Use of proceeds

The company intends to use the proceeds to repay principal on debt maturing in 2022 and/or 2023. Pending such uses, Royal Caribbean may temporarily apply the proceeds to repay borrowings under its revolving credit facilities or other borrowings.

 

The notes are being offered only to qualified institutional investors outside the US and are expected to be issued on or around Aug. 18.

 

Royal Caribbean prices upsized $1.25b senior unsecured notes (seatrade-cruise.com)

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51 minutes ago, Biker19 said:
Royal Caribbean Group priced its private offering of $1.25b of 11.625% senior unsecured notes due 2027.

The offering was upsized from $1b.
 

Use of proceeds

The company intends to use the proceeds to repay principal on debt maturing in 2022 and/or 2023. Pending such uses, Royal Caribbean may temporarily apply the proceeds to repay borrowings under its revolving credit facilities or other borrowings.

 

The notes are being offered only to qualified institutional investors outside the US and are expected to be issued on or around Aug. 18.

 

Royal Caribbean prices upsized $1.25b senior unsecured notes (seatrade-cruise.com)

The good news that yield is only about 8.7% over 5 year treasuries. Today they call these high yield bonds. They used to call these Junk bonds which would be apropos for a cruise line bond these days. 🙂 


Or perhaps we need a new name for this type of bond. 🤔

Scuttle Bonds?

Salvage Bonds?

Wreck bonds?

Rust Bucket Bonds?

 

Edited by DirtyDawg
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Wow that is a high FACE interest.  Guess we'll have to wait and see how they trade.  Yep, this is what is known as junk bonds.  However, if you believe in equity (stock), some of their junk debt is providing quite a return.  No for me; either.

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So they're issuing $1.25B five year 11 5/8% notes to refund near term debt including the remainder of the 2 7/8% and 4 1/4% converts due next year.  They'll argue eliminating converts is anti-dilutive but that high coupon will likely increase annual interest expense almost $100MM.

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  • 1 month later...

From their SEC filing today:

 

On September 19, 2022, we amended our unsecured term loan agreement with Bank of America, N.A., as administrative agent (the “BofA Term Loan”) to, among other things, extend the maturity date of advances held by consenting lenders by twelve months to October 2024. Consenting lenders received a prepayment equal to 10% of their respective outstanding advances. Following this amendment, the aggregate outstanding principal balance of advances under the BofA Term Loan is $501.6 million, with $30.0 million maturing in October 2023 and $471.6 million maturing in October 2024.

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2 hours ago, Biker19 said:

From their SEC filing today:

 

On September 19, 2022, we amended our unsecured term loan agreement with Bank of America, N.A., as administrative agent (the “BofA Term Loan”) to, among other things, extend the maturity date of advances held by consenting lenders by twelve months to October 2024. Consenting lenders received a prepayment equal to 10% of their respective outstanding advances. Following this amendment, the aggregate outstanding principal balance of advances under the BofA Term Loan is $501.6 million, with $30.0 million maturing in October 2023 and $471.6 million maturing in October 2024.

Simply delays the execution by a year.

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From RCL's SEC filing today:

 

MIAMI  September 22, 2022 – Royal Caribbean Cruises Ltd. (NYSE: RCL) (the “Company”) today announced that it has commenced a private offering of senior guaranteed notes due 2029 (the “Senior Guaranteed Notes”) for an aggregate principal amount of $1.0 billion and a concurrent private offering of senior secured notes due 2029 (the “Senior Secured Notes” and, collectively with the Senior Guaranteed Notes, the “Notes”), for an aggregate principal amount of $1.0 billion. The Company intends to use the proceeds from the sale of the Senior Guaranteed Notes and the Senior Secured Notes, together with cash on hand, to redeem all its outstanding 9.125% Priority Guaranteed Notes due 2023 and 10.875% Senior Secured Notes due 2023, respectively, concurrently with the respective closing of the Senior Guaranteed Notes and Senior Secured Notes offerings (including to pay fees and expenses in connection with such redemptions).

 

 

 

 

 

The Senior Guaranteed Notes will be guaranteed on a senior unsecured basis by RCI Holdings LLC, which owns 100% of the equity interests of certain of the Company’s wholly-owned vessel-owning subsidiaries.

 

The Senior Secured Notes will be guaranteed by Celebrity Cruises Inc., Celebrity Cruises Holdings Inc. and certain of the Company’s wholly-owned vessel owning subsidiaries. The Senior Secured Notes and the related guarantees will be secured by 26 of the Company’s vessels and material intellectual property of the Company in an amount not to exceed permitted capacity under the Company’s existing indebtedness.

 

 

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From the same filing:

 

Recent Developments

 

Bookings Update

 

The Company’s demand remains strong, with bookings significantly outpacing 2019 levels. The Company announced the easing of testing and vaccination protocols from most itineraries on August 23, 2022, resulting in an immediate positive impact on bookings for both 2022 and 2023 sailings. Since the announcements, overall bookings have been significantly higher versus the same period in 2019. From a cumulative standpoint, 2023 remains booked within historical ranges at much higher rates.

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1 hour ago, Biker19 said:

From the same filing:

 

Recent Developments

 

Bookings Update

 

The Company’s demand remains strong, with bookings significantly outpacing 2019 levels. The Company announced the easing of testing and vaccination protocols from most itineraries on August 23, 2022, resulting in an immediate positive impact on bookings for both 2022 and 2023 sailings. Since the announcements, overall bookings have been significantly higher versus the same period in 2019. From a cumulative standpoint, 2023 remains booked within historical ranges at much higher rates.

Yet the stock sits almost $90 per share below it’s all time high of $136+, the last I looked. The $3.16 per share dividend is still nowhere to be seen. Tell you a lot about what the professional investors think of the future of the company, at least short term.

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