Royal Caribbean Group is offering $650m in unsecured notes in a bid to buy up debt tied to its planned acquisition of Silversea Cruises.
The Richard Fain-led cruiseship giant plans to put the money from the sale of the 2026 unsecured notes toward redeeming the $620m in senior secured notes issued by Silversea Cruise Finance.
The Silversea notes, which carry a 7.25% interest rate, mature in 2025, according to a document filed with the US Securities and Exchange Commission (SEC).
Royal Caribbean is offering the $650m in 2026 notes to institutional buyers in the US, as well as some non-US buyers.
The Miami cruiseship in June 2018 acquired 67% of Silversea, the luxury and expedition cruiseship company, in a $1bn transaction that was financed through debt.
New York-listed Royal Caribbean borrowed $700m from five banks the following month to pay for most of the two-thirds stake in Silversea Cruises, which now owns 10 ships.
The loan came from JPMorgan Chase Bank, Bank of America, Citibank, Goldman Sachs Bank and Morgan Stanley Bank, which each contributing $140m.
The cruise major then bought the rest of Silversea in July 2020 with 5.2m shares, or about 2.5%, of company stock from Heritage Cruise Holding.
Royal Caribbean and the rest of the cruise industry are fighting to emerge from a Covid-19 pandemic that shut them down on March 2020 and put them in billions of dollars in debt.
The US government in late May gave Royal Caribbean approval to sail two cruiseships in US waters later this month — one as a simulated voyage and the other as a revenue sailing.
