RCCL stock price

[intr3pid]

1 hour ago, DirtyDawg said:

That CCL debt was issued at a yield of 10.75% . They call those bonds Junk bonds.

 

 

675 basis points over LIBOR for a secular growth business.  Clearly, someone was tempted.

[intr3pid]

39 minutes ago, Kilroyshere said:

At some point, almost every equity, debt and venture has it's day as pickers deemed them speculations at times and investments at other times.

Would be "pickers'.  The difference between investing and speculating is how much you know about what you are doing.

[DirtyDawg]

6 minutes ago, intr3pid said:

675 basis points over LIBOR for a secular growth business.  Clearly, someone was tempted.

🤣 Sorry, but using the spread over LIBOR is maybe the funniest thing posted on this thread. 🤣

 

You better hope this secular growth business will outlive LIBOR. 

 

https://www.forbes.com/advisor/investing/what-is-libor/

 

Edited December 3, 2022 by DirtyDawg

[intr3pid]

1 minute ago, DirtyDawg said:

🤣 Sorry, but using the spread over LIBOR is maybe the funniest thing posted on this thread. 🤣

Actually, that's precisely how debt investments are priced.  Not on Forbes or CC. 

 

In capital markets.

[DirtyDawg]

4 minutes ago, intr3pid said:

Actually, that's precisely how debt investments are priced.  Not on Forbes or CC. 

 

In capital markets.

Please look up what LIBOR is. 

[intr3pid]

4 minutes ago, DirtyDawg said:

Please look up what LIBOR is. 

I'm sure if you keep trying, you will eventually have a point to make.

[DirtyDawg]

9 minutes ago, intr3pid said:

I'm sure if you keep trying, you will eventually have a point to make.

I am trying to be nice to you. Please look up what LIBOR is and the maturity of the debt CCL issued. 

[Baron Barracuda]

Libor was discredited by a rate rigging scandal, has not been relied upon for several years and is scheduled to go away entirely very soon.  Even prior to being discredited it only served as a benchmark for short term borrowings.  Fixed rate term facilities are most often priced as a markup over matched maturity $UST. 

Edited December 3, 2022 by Baron Barracuda

[Baron Barracuda]

With regard to the 60% increase in RCL stock over the past few months one might just as easily compare the current $60 price to the 2021 YE price of $80 which would reveal a YTD loss of 25%.  

[intr3pid]

4 minutes ago, Baron Barracuda said:

Libor was discredited by a rate rigging scandal, has not been relied upon for several years and is scheduled to go away entirely very soon.  Even prior to being discredited it only served as a benchmark for short term borrowings.  Fixed rate term facilities are most often priced as a markup over matched maturity $UST. 

All of CCL's variable rate debt is priced in LIBOR or EURIBOR (for a EUR loan) with the exception of the most recent GBP loan which was priced in SONIA.  UST% is very rarely used in pricing loans due to its sensitivity to non-lending macro/geopolitical/tax factors.  You might see it being used for calibration, yes,.  It's too early to tell of a general trend post pandemic/Brexit.

 

6 minutes ago, Baron Barracuda said:

With regard to the 60% increase in RCL stock over the past few months one might just as easily compare the current $60 price to the 2021 YE price of $80 which would reveal a YTD loss of 25%.  

Doubt many here will be banging the table to buy the stock at $80 purely for a price gain. 

 

At $37, the discussion becomes interesting.

[NMTraveller]

30 minutes ago, Baron Barracuda said:

With regard to the 60% increase in RCL stock over the past few months one might just as easily compare the current $60 price to the 2021 YE price of $80 which would reveal a YTD loss of 25%.  

I remember when it was $120.  

 

Why purchase a stock when it is not likely to be profitable until 2024 or 2025  or ??? with a high debt load?

 

Sure you can day trade it, but how many are successful at that?

Edited December 4, 2022 by NMTraveller

[DirtyDawg]

41 minutes ago, intr3pid said:

All of CCL's variable rate debt is priced in LIBOR or EURIBOR (for a EUR loan) with the exception of the most recent GBP loan which was priced in SONIA.  UST% is very rarely used in pricing loans due to its sensitivity to non-lending macro/geopolitical/tax factors.  You might see it being used for calibration, yes,.  It's too early to tell of a general trend post pandemic/Brexit.

 

Doubt many here will be banging the table to buy the stock at $80 purely for a price gain. 

 

At $37, the discussion becomes interesting.

But what they issued was fixed rate with a maturity of May 2028.

 

"The Senior Priority Notes will pay interest semi-annually on May 1 and November 1 of each year, beginning on May 1, 2023, at a rate of 10.375% per year, are callable beginning May 1, 2025 and priced at 98.465% of their face value. The Senior Priority Notes will mature on May 1, 2028."

 

I am not a bondie, but I have managed balanced funds, and I have never seen any one issue a 5 year fixed rate bond priced at xx basis points over a 3, 6, or 12 month index rate. They issue those at xx basis points over a 5 year risk free rate like a 5 year treasury.

 

Edited December 4, 2022 by DirtyDawg

[Kilroyshere]

36 minutes ago, Baron Barracuda said:

With regard to the 60% increase in RCL stock over the past few months one might just as easily compare the current $60 price to the 2021 YE price of $80 which would reveal a YTD loss of 25%.  

The OP wasn't the YE price. It was September 30, 2022.

 

At that date and week, one major wire house said one of the big 3 would go bankrupt. Most analysts had their strongest sell opinions.

 

I posted that as a contrarian, I saw an opportunity that would be opposite of conventional street wisdom. Can't argue with 60% versus the indexes.

 

I'm not saying cruise stocks are the end all investment as a piece of ones assets.

 

The time of the OP was a snapshot opportunity and it worked.

 

That in and of itself can be for some, one component of investing, speculating or call it what ever name you care to. 

 

[D C]

7 hours ago, d9704011 said:

'New math' would arrive at the same conclusion.

By the time new math was finished with drawing the tic tac toe board and the subsequent seemingly pointless diagonal slashes, followed by disconnected multiplication and addition of numbers in no relevant fashion, the stock price went up, went down, went up, went down, and ended up who knows where. 

[intr3pid]

1 hour ago, DirtyDawg said:

But what they issued was fixed rate with a maturity of May 2028.

 

"The Senior Priority Notes will pay interest semi-annually on May 1 and November 1 of each year, beginning on May 1, 2023, at a rate of 10.375% per year, are callable beginning May 1, 2025 and priced at 98.465% of their face value. The Senior Priority Notes will mature on May 1, 2028."

 

I am not a bondie, but I have managed balanced funds, and I have never seen any one issue a 5 year fixed rate bond priced at xx basis points over a 3, 6, or 12 month index rate. They issue those at xx basis points over a 5 year risk free rate like a 5 year treasury.

 

There are two separate points here.

 

Point 1 is about the use of LIBOR - or any overnight equivalent (take your pick) - in pricing variable rate loans.  The part of my post you are quoting is my explanation of why LIBOR is still relevant in CCL's variable-rate loans despite its controversies.  

 

Point 2 is the fixed vs variable comparison.  How expensive the loan is decided not by an absolute number but by a spread over a reference rate.  (So, 10.375% would be a great borrowing rate if the reference rate was 10%.) 

 

Why compare a fixed-rate loan with a reference rate plus spread?  Because any fixed-rate loan can be swapped into a variable-rate equivalent and vice versa.  (CCL itself has done many such swaps.)  In fact, a fixed-rate junk bond/LBO deal is done first up as a variable-rate loan since you need to close the deal faster than the lawyers can the agreements with a rate inked in.  Swaps are a godsend.

 

Finally, the OIS rate is the correct reference rate to use - but I can't compare it with that on any other piece of CCL debt.  It's almost never disclosed by the company.  LIBOR is simply a rough proxy.

Edited December 4, 2022 by intr3pid

[Lastdance]

I own the stock.  I have enjoyed the extra OBC with the stock.  I am also ahead with the stock.  The rest is just a bunch of stuff you really do not need to know at all!  Just make sure you have 100 shares to get the extra OBC if that is of interest...simple math!

Edited December 4, 2022 by Lastdance

[D C]

13 minutes ago, Lastdance said:

I own the stock.  I have enjoyed the extra OBC with the stock.  I am also ahead with the stock.  The rest is just a bunch of stuff you really do not need to know at all!  Just make sure you have 100 shares to get the extra OBC if that is of interest...simple math!

Exactly. It was cheap enough to justify buying for the extra OBC. If it goes way up, I'll sell and have MORE obc.  

 

Only issue is that I booked a princess cruise. Now I'll have to buy 100 of those at <$10 and get $100 in obc which is like a 10% dividend.  Guess I'll bite that bullet. 

Edited December 4, 2022 by D C

[DirtyDawg]

10 hours ago, intr3pid said:

There are two separate points here.

 

Point 1 is about the use of LIBOR - or any overnight equivalent (take your pick) - in pricing variable rate loans.  The part of my post you are quoting is my explanation of why LIBOR is still relevant in CCL's variable-rate loans despite its controversies.  

 

Point 2 is the fixed vs variable comparison.  How expensive the loan is decided not by an absolute number but by a spread over a reference rate.  (So, 10.375% would be a great borrowing rate if the reference rate was 10%.) 

 

Why compare a fixed-rate loan with a reference rate plus spread?  Because any fixed-rate loan can be swapped into a variable-rate equivalent and vice versa.  (CCL itself has done many such swaps.)  In fact, a fixed-rate junk bond/LBO deal is done first up as a variable-rate loan since you need to close the deal faster than the lawyers can the agreements with a rate inked in.  Swaps are a godsend.

 

Finally, the OIS rate is the correct reference rate to use - but I can't compare it with that on any other piece of CCL debt.  It's almost never disclosed by the company.  LIBOR is simply a rough proxy.

I agree 100% Swaps are a godsend from the issuers perspective.  Any 2nd year Finance student knows that. Or better know that. After the debt is issued at a fixed rate it can be swapped for floating if they can find a counterparty or counterparties who want to to the opposite. 

 

15 hours ago, intr3pid said:

675 basis points over LIBOR for a secular growth business.  Clearly, someone was tempted.

But in your original post on this subject you indicated the buyers of those bonds "those tempted" bought at 675 over some LIBOR(OIS) rate. CCL might have swapped it for 675 over a LIBOR (OIS) rate after issue, but did they? I don't follow CCL closely so I might have missed that announcement. Please feel free to post that information from CCL. I'm curious what they managed to do with this issue. 

 

So my apologies for my first post. I was on the buy side for 30 years so that's my perspective. ( Well, actually only 28 years because they managed to lure my over to the dark (sell) side for 2 years).  You were coming from the issuers side. 

Edited December 4, 2022 by DirtyDawg

[grandgeezer]

12 hours ago, D C said:

Exactly. It was cheap enough to justify buying for the extra OBC. If it goes way up, I'll sell and have MORE obc.  

 

Only issue is that I booked a princess cruise. Now I'll have to buy 100 of those at <$10 and get $100 in obc which is like a 10% dividend.  Guess I'll bite that bullet. 

Maybe I’m missing something but I don’t understand why the obc is used in a calculation  to show a 10% dividend. In order to get the obc you have to book a cruise. Your calculation should be based on what you paid. the obc amount is based on the number of days of the cruise.For example if you paid $3,000 and got $100 obc, that’s 3.3%. If you paid $5,000, it’s 2%, etc. This would be for every new cruise you book, no cruises booked, no $100 or whatever amount. Dividends pay out no matter if you never invest another penny with the company.

Am I missing something that makes this assumption wrong.

[Lastdance]

2 hours ago, grandgeezer said:

Maybe I’m missing something but I don’t understand why the obc is used in a calculation  to show a 10% dividend. In order to get the obc you have to book a cruise. Your calculation should be based on what you paid. the obc amount is based on the number of days of the cruise.For example if you paid $3,000 and got $100 obc, that’s 3.3%. If you paid $5,000, it’s 2%, etc. This would be for every new cruise you book, no cruises booked, no $100 or whatever amount. Dividends pay out no matter if you never invest another penny with the company.

Am I missing something that makes this assumption wrong.

I guess it comes down to how you feel about owning the stock, getting your OBC for cruises and then selling it.  Paying a lot for a cruise sure diminishes the value of the OBC if calculated this way, but selling at a reasonable profit isn't bad either, especially if you have taken a lot of lower cost cruises.  For me personally, I do not factor in the cost of my cruise, as that comes from an entirely different account...but yes, you made a valid point!

[Cruising Cindy Lou]

A blonde jumping in. I never really owned stock. In 2020 when COVID hit and stock market plunged I asked my husband to buy me both RCL and NCHL stock. Should have done it myself, when it went up to double my money he sold it. Just a few more weeks and I could have about tripled it. RCL had gone back up to $98 when cruising started back up. I noticed few months ago when the whole market went down it dropped big time again. I jumped back on board. Wish I had bought more. I had joined the casino (stock market), after doing so well my first go around. The cruise stocks are my only green in my portfolio. 

[DirtyDawg]

1 hour ago, Cruising Cindy Lou said:

A blonde jumping in. I never really owned stock. In 2020 when COVID hit and stock market plunged I asked my husband to buy me both RCL and NCHL stock. Should have done it myself, when it went up to double my money he sold it. Just a few more weeks and I could have about tripled it. RCL had gone back up to $98 when cruising started back up. I noticed few months ago when the whole market went down it dropped big time again. I jumped back on board. Wish I had bought more. I had joined the casino (stock market), after doing so well my first go around. The cruise stocks are my only green in my portfolio. 

Are you working with a licenced Financial Planner (not a broker)? If not, you should look into it.

 

[Stockjock]

1 hour ago, DirtyDawg said:

Are you working with a licenced Financial Planner (not a broker)? If not, you should look into it.

 

I've been with one of the big Wall Street firms for over 30 years.  While I've had the option to take the "certified financial planner" courses, I've passed on those.  From what I could gather, most of the training is pretty esoteric and a lot of time is spent on areas that aren't relevant to my business and would not likely be used on a day-to-day basis.  Based on conversations with some I know with the CFP designation, I sense that many/most of them do it because it looks/sounds good.  So obviously to each their own, but CFP isn't a big deal to me.

My suggestions follow:

1. I prefer individuals working for well-established firms with deep pockets.

2. Check the individual at Finra.org.  Look for Brokercheck.  It will provide the experience and license for financial professionals.  It will show "disclosure events" too as a "yes" or "no".  "No", is usually good.  "Yes" may be something innocuous (such as serving on an HOA board) or something negative, such as customer complaints, lawsuits, settlements, and such.

3. On Finra, there is also a link to SEC.gov and they have a similar search function for Registered Investment Advisers with similar functionality.  Advisors can be one or the other or both.  They also show licenses held.  For example, I have been a manager, so they'd show supervisor's licenses, which require different training on an initial and ongoing basis.

4. Finra shows employment history.  I personally prefer individuals who don't jump from one ship to the other often, as it may be inconvenient for the customer.  The game is to stay at one firm for 6 or 7 years, cut a deal with a new firm, and then potentially put down the old firm when money may be the true motivation.  I don't care for that game.  I almost lost a good client to a fellow who literally was a pizza flipper 2 years prior, so employment history can help one to avoid that.

5. Have a conversation with the person.  Perhaps several.  Do you connect with them?   Figuratively speaking, do they speak your language?  Do you have enough money that they would be willing to work with you?  As an example, we consider anything below $250,000 to be a "small household" and I have severe payout restrictions.  I can't be paid at all on accounts under $100,000, so someone with $30,000 is probably not a good fit for someone in my situation, but could be a great fit elsewhere.  The "fit" is a two-way street.

Just 5 quick tips.  I think people sometimes boil down decisions to something quite simple (hire a CFP, hire a CPA, buy 5 star rated whatever) and in doing so, they may be overlooking many excellent options.

As a side note, my GF is an accountant but not a CPA.  She moves around many millions of dollars on a regular basis for a good sized corporation and is quite good at what she does.  Any company would have erred by not considering her for the job merely because she didn't have that CPA designation.

The usual disclaimer: The preceding is not a recommendation for or against securities, an offer to buy or sell securities or a solicitation.  Information presented is solely my opinion and is presented for the purposes of education and casual conversation only.

 

Edited December 5, 2022 by Stockjock

[DirtyDawg]

7 minutes ago, Stockjock said:

I've been with one of the big Wall Street firms for over 30 years.  While I've had the option to take the "certified financial planner" courses, I've passed on those.  From what I could gather, most of the training is pretty esoteric and a lot of time is spent on areas that aren't relevant to my business.  Based on my conversations with those I know with the CFP designation, I sense that many/most of them do it because it looks/sounds good.  So obviously to each their own, but CFP isn't a big deal to me.

My suggestions follow:

1. I prefer individuals working for well-established firms with deep pockets.

2. Check the individual at Finra.org.  Look for Brokercheck.  It will provide the experience and license for financial advisors.  It will show "disclosure events" too as a "yes" or "no".  No, is usually good.  "Yes" may be something innocuous (such as on a HOA board) or something negative, such as customer complaints and such.

3. On Finra, there is also a link to SEC.gov and they have a similar search function for Registered Investment Advisers with similar functionality.  Advisors can be one or the other or both.  They also show licenses held.  For example, I have been a manager, so they'd show supervisor's licenses, which require different training on an initial and ongoing basis.

4. Finra shows employment history.  I personally prefer individuals who don't jump from one ship to the other often, as it may be inconvenient for the customer.  The game is to stay at one firm for 6 or 7 years, cut a deal with a new firm, and then potentially put down the old firm when money may be the true motivation.  I don't care for that game.

5. Have a conversation with the person.  Perhaps several.  Do you connect with them?   Do you have enough money that they would be willing to work with you?  As an example, we consider anything below $250,000 to be a "small household" and I have severe payout restrictions.  I can't be paid at all on accounts under $100,000, so someone with $30,000 is probably not a good fit for someone in my situation, but could be a great fit elsewhere.  The "fit" is a two-way street.

Just 5 quick tips.  I think people sometimes boil down decisions to something quite simple (hire a CFP, hire a CPA, buy 5 star rated whatever) and in doing so, they may be overlooking many excellent options.

As a side note, my GF is an accountant but not a CPA.  She moves around many millions of dollars on a regular basis for a good sized corporation and is quite good at what she does.  Any company would erred by not considering her for the job merely because she didn't have that CPA designation.

The usual disclaimer: The preceding is not a recommendation for or against securities, an offer to buy or sell securities or a solicitation.

 

I was a Director of one of the Big Wall Street firm's Canadian subsidiary for a few years but I was mostly on the asset management (Buy) side.  But as a Director I had a lot of dealings with a lot of our retail brokers and their management teams so I'm a little biased against the typical retail broker model. At that time, most of their compensation was driven by commissions and volume was emphasized over quality, hence my short stay  - and my bias.  I'm sure things have changed since and a more fiduciary model has developed so my advice to any retail investor would be to seek out an advisor who is a true fiduciary and not compensated with a commission model. 

[Stockjock]

4 minutes ago, DirtyDawg said:

I was a Director of one of the Big Wall Street firm's Canadian subsidiary for a few years but I was mostly on the asset management (Buy) side.  But as a Director I had a lot of dealings with a lot of our retail brokers and their management teams so I'm a little biased against the typical retail broker model. At that time, most of their compensation was driven by commissions and volume was emphasized over quality, hence my short stay  - and my bias.  I'm sure things have changed since and a more fiduciary model has developed so my advice to any retail investor would be to seek out an advisor who is a true fiduciary and not compensated with a commission model. 

The vast majority of the business for many is fee-based.  I prefer this, as it removes most conflicts of interest, and everyone benefits from increases in asset value and suffers when the asset values decline.  So in essence, all are on the same side of the table.  Plus, there are typically more stringent rules in place for advisory fee-based accounts and a fiduciary standard as well.

Edited December 5, 2022 by Stockjock