Royal Caribbean Floats $2 Billion in Bonds as Optimism Rises

Royal Caribbean is hoping to leverage resurgent investor optimism about the cruise industry by floating $2 billion of bonds.
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Royal Caribbean  (RCL) - Get Report plans to float up to $2 billion in bond offerings as it looks to leverage resurgent investor optimism about the cruise industry's future.

Royal Caribbean said on Thursday it would roll out the bonds in two concurrent offerings, $1 billion in senior guaranteed notes and $1 billion senior convertible notes, both due in 2023.

The cruise line giant said it planned to use the money raised through the bond offerings to pay down debt and for general corporate purposes.

The move comes as Royal Caribbean and other cruise lines have seen their stock prices rally after they took a big hit from the coronavirus, which has shut down the industry across the world.

Royal Caribbean has led the way up, with a more than 40% increase over the past month from its pandemic low.

That's followed by Norwegian  (NCLH) - Get Report, which has seen its shares rise more than 30%, and Carnival  (CCL) - Get Report, which has seen its stock price rebound more than 23%.

Still, Royal Caribbean and the cruise industry face signs of more stormy weather ahead.

On Wednesday Morgan Stanley analyst Jamie Rollo issued a bearish note on the industry's prospects over the next year or two.

The analyst resumed coverage of Royal Caribbean and Carnival with underweight ratings, while downgrading his outlook on Norwegian to underweight as well.

Royal Caribbean shares at last check were down 3.6% at $56. They'd closed up 3.8% on Wednesday.