RCG-Royal Caribbean Group unveiled plans on Tuesday, October 13, to raise US$1 billion in new capital, the latest effort by a cruise ship operator to shore up liquidity as the business remains curtailed by the Coronavirus (COVID-19) pandemic.
Royal Caribbean said it had launched a private offering of US$500 million in senior convertible notes due 2023, with a purchase option to buy an additional US$75 million of the convertible notes. It had also launched a public offering of US$500 million shares of common stock, with an underwriter option to buy US$75 million in additional shares.
After the news, shares of all 3 major United States cruise operators were lower. Royal Caribbean was down 10.9%, at US$62.19, in recent trading, while CCL-Carnival Cruise Line was off 6.5%, at US$14.22, and NCLH-Norwegian Cruise Line Holdings was down 6.9%, at US$16.83. Year to date, all 3 stocks are down 53% to 72%.
The three cruise companies have been largely sidelined by the COVID crisis and have been burning through hundreds of millions per month. Carnival, for its part, raised over US$10 billion in capital, mostly in debt, in order to help it weather the crisis.