Royal Caribbean has entered into a new financing facility that to further boost the company’s liquidity as the cruise market tanks amid the coronavirus pandemic.
Royal Carribbean announced Monday it has entered into a $2.2 billion 364-day secured term loan facility which can ben extended an additional 364 days at the option of the company.
The company said it has borrowed the full amount available under the term loan to further bolster its liquidity.
Including the new financing, Royal Caribbean says it now has over $3.6 billion of liquidity comprised of cash deposits and its existing undrawn revolving credit facilities. In addition, the company has committed financing for all of its new ships on order.
“This is a period of unprecedented disruption for the cruise industry,” said Jason T. Liberty, executive vice president and CFO. “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.”
Royal Caribbean has been forced to suspend all sailings globally amid the COVID-19 pandemic. Sailings from the U.S. are tentatively scheduled to return to service on April 11, 2020. Royal Caribbean brands operate a total of 61 cruise ships with an additional 17 on order as of December 31, 2019.
Royal Caribbean has seen its share price fall from a 52-week high of $135 in mid-January to around $33 currently.
Rival Carnival Corporation has taken similar steps to shore up its liquidity, including cutting investments and expenses and looking for additional financing. The company last week announced it was moving borrow about $3 billion for six months under an existing credit facility, fully drawing down the credit line to meet working capital, general corporate and other needs.