Royal Caribbean Reportedly Seeks New Financing to Weather Travel Shutdown

Royal Caribbean reportedly is in talks to raise new financing to weather the coronavirus pandemic's disruption to the cruise industry.
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Royal Caribbean Cruises  (RCL) - Get Report is in talks to raise new financing to weather the coronavirus pandemic's disruption to the cruise industry, Bloomberg reported, citing people with knowledge of the matter.

The cruise operator has been discussing a package that may include as much as $600 million of bonds and is working with Morgan Stanley on a possible offering, the people told Bloomberg. Royal Caribbean also has considered selling convertible bonds and equity.

The company extended the suspension of its fleet through June 11 and last week it was reported Royal Caribbean would be cutting 26% of its workforce. Most of the cuts will involve layoffs as well as some furloughs, an executive told the Miami Herald.

Late last month, Royal Caribbean said it had obtained a $2.2 billion secured term credit line to bolster its liquidity in response to the industrywide shutdown caused by the coronavirus.

Including the new financing, Royal Caribbean said it has more than $3.6 billion of liquidity, made up of cash deposits and its current undrawn revolving credit facilities. 

The company said it also has committed financing for all its new ships on order. 

'"This is a period of unprecedented disruption for the cruise industry," Jason T. Liberty, executive vice president and chief financial officer, said in a statement at the time.

"We continue to take decisive actions to protect the company's financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans.”

The stock was up 5.7% to $35.95 in trading Thursday. Shares up to Wednesday had fallen nearly 75% this year.