TUI Cruises has returned to the bond market for the second time in six months with a €223.5m ($260m) unsecured bond offering.
The German cruise operator's five-year bond, which will carry a coupon of 6.5%, will be used to repay existing indebtedness.
Watson Farley & Williams, which has advised TUI Cruises on the financial arrangements related to the bond issue said the offering was "multiple times oversubscribed".
Lucy Shtenko, WFW's London Assets and Structured Finance Partner, commented: "It is great to see the continuing strength of the cruise sector and investor confidence through this successful second bond issuance despite the recent challenges the industry has faced."
In May TUI Cruises issued a bond with a volume of €300m and a coupon of 6.5% in what was its first such fundraiser since its foundation.
The cruise line, which was set up in 2007, has previously used a combination of company cash flow and bank loans to fund its expansion.
Speaking just after the first bond issue, TUI Group chief financial officer Sebastian Ebel said it was an "important signal" for future financing, for investments and for the future of TUI Cruises.
He added that the success of the bond issue showed that investors were "convinced of TUI's strategy, the prospects for the cruise industry and tourism, and the return to success and growth after the pandemic".
Peter Kruger, TUI AG executive board member responsible for joint ventures, strategy and M&A said at the time: "With the successful placement of the bond, the company has financed itself via the capital market for the first time since its foundation.
"With this first time launch TUI Cruises has accessed capital markets allowing to diversify its financing sources in the future allowing for more flexible (re-)financings."
TUI Cruises is a joint venture between TUI Group and Royal Caribbean Group and has a fleet of 12 vessels, with over 19,000 berths.
The cruise line was able to reduce operating costs by 60% through minimised labour costs, furloughs and layoffs during the pandemic, according to ratings agency Fitch.
It was the first European mass-market cruise operator to return to service in July 2020 after receiving approvals from German and Greek port authorities under the EU Healthy GateWays policy.
The company was able to operate about 30% of its ships for most of the second half of 2020, albeit at lower occupancies. Its ramp-up accelerated in May 2021 and most ships were back in operation by August 2021.
