Item 1.01 Entry into a Material Definitive Agreement
Term Loan
On
The Company's obligations under the Loan Agreement are guaranteed by our
wholly-owned subsidiaries,
The proceeds of the Loan Agreement will be used for working capital and other general corporate purposes. Interest accrues at LIBOR plus a margin of 2.25% which increases to 2.50% and 2.75%, 180 days and 365 days, respectively, after the Funding Date. In addition, we will be required to pay a duration fee in an amount equal to 0.25% of the aggregate principal amount of the Loans outstanding every 60 days.
The Loan Agreement contains customary conditions, representations and warranties for transactions of this type and (i) affirmative covenants which are substantially similar to the affirmative covenants in our other corporate credit facilities (including, but not limited to, delivery of financial and other information, compliance with laws, requirements related to vessel registration and insurance requirements), (ii) a financial covenant that requires us to maintain a collateral coverage ratio of not less than 2.50:1.00 as at the last day of any fiscal quarter and (iii) negative covenants which include, but are not limited to, restrictions on incurring subsidiary debt, incurring liens, selling certain assets without satisfying certain conditions (including applying the proceeds to prepay outstanding Loans), making investments, making certain restricted payments (including increasing dividends) and engaging in certain transactions with affiliates, in each case, subject to customary carve-outs and baskets.
The Loan Agreement also contains customary events of default (including
non-payment of principal or interest and breaches of covenants). If any event of
default occurs and is not cured within the applicable grace period, the
outstanding Loans may be accelerated by lenders holding a majority of the Loans.
Entities affiliated with two directors of the company,
Certain of the lenders participating in the Loans, and affiliates of those parties, provide banking, investment banking and other financial services to us from time to time for which they have received, and will in the future receive, customary fees.
The foregoing description of the provisions of the Loan Agreement is summary in nature and is qualified in its entirety by reference to the full and complete terms of the Loan Agreement, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The disclosure required by this item is included in Item 1.01 of this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits 10.1 Term Loan Agreement, dated as ofMarch 23, 2020 , amongRoyal Caribbean Cruises Ltd. , the various financial institutions as are or shall become parties thereto andMorgan Stanley Senior Funding, Inc. , as administrative agent for the lender parties and as collateral agent for the secured parties 99.1 Press release datedMarch 23, 2020 .
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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