Royal Caribbean to price $2 billion two-part notes due January 2029 in Thursday drive-by

By Paul A. Harris

Portland, Ore., Sept. 22 – Royal Caribbean Cruises Ltd. plans to price $2 billion of high-yield notes due January 2029 in a Thursday drive-by trailing an investor conference call, according to market sources.

The offering includes $1 billion of senior secured notes (Ba3/BB-) with initial guidance of 8¼% to 8½%.

It also includes $1 billion of senior priority guarantee notes (B3/B+) with initial guidance that has them coming 100 basis points behind the secured notes.

The deal is heard to be 40% done in reverse inquiry across both tranches, according to a sellside source in New York.

Morgan Stanley & Co. LLC in the sole bookrunner.

The Rule 144A and Regulation S for life notes, which have a tenor of 6.25 years, come with 2.5 years of call protection, with the first call date to be set in April 2025.

The 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 guarantee 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 Miami-based cruise ship operator plans to use the proceeds, together with cash on hand, to redeem all of its outstanding 9 1/8% priority guaranteed notes due 2023 and its 10 7/8% senior secured notes due 2023.

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