Random Curiosity: How long to pay off a ship?

[aeonix01]

I'm just wondering how long it takes RCCI to pay off some of these bath toys of theirs. I can't even begin to figure out what it would take.

 

Anyone have any thoughts, or even possibly real life knowledge of something like this?

[wl2cruise]

I'm just wondering how long it takes RCCI to pay off some of these bath toys of theirs. I can't even begin to figure out what it would take.

 

Anyone have any thoughts, or even possibly real life knowledge of something like this?

 

I believe I read in a regulatory filing the loans where for 7 years on the voyager class.

[novanoto]

That was one of the questions our oasis cd, mike, addressed last week. For the newer ships...I assume oasis and allure, he said they take 10-12 years!

[aeonix01]

That was one of the questions our oasis cd, mike, addressed last week. For the newer ships...I assume oasis and allure, he said they take 10-12 years!

 

Amazing! That's not really that long considering the cost to build them. I take 3 years to pay off a car. Lol.

 

I think on a special regarding the Queen Mary 2, they expect her to sail for about 37 years or so. 1/3 of a ships life to pay her off wouldn't be that bad.

[orville99]

Unfortunately, this is about as simple as I can make this:

 

Generally, large expenditures like this are funded with corporate bonds or similar senior secured debentures. Terms may vary somewhat, but the standard timeframes are in multiples of five - 5 year; 10 year; up to 30 years. Depending on length, there may or may not be call or refunding provisions. 5 year bonds generally don't have call provisions. 10 year or longer bonds generally have a call provision (debtholders agree not to ask for the payoff of the debt until after a specific date, and the company agrees not to payoff the debt any sooner) at their half maturity. Bonds with longer than a 10 year maturity may also have refunding provisions that permit the company to essentially refinance the remaining debt if there is a financial benefit (i.e. interest rate swings), and the debtholders agree. Also, depending on the size of the debt, and the company's overall long term debt ratio, debtholders may also require a surety bond (a % of the debt proceeds set aside in escrow as a guarantee against default).

 

In practice, it's a lot more complex.

 

If RCI expects to payoff the bonds in 10-12 years, my best guess is that they are 20 year bonds with a 10 year call provision

[bus man]

I've thought about this in regards to the Titanic. After all the millions and millions it cost them to build the thing, they didn't even get one complete voyage's worth of revenue out of her. I don't know if the White Star Line had to refund the tickets for the people who had to experience the "unfortunate incident," but the only revenue that the line earned free and clear was the relative pittance from the handful of people who boarded in Southhampton and got off at either Cherbourg or Queenstown, before she headed out into the Atlantic.

 

So in other words, the Titanic was an utter and complete financial disaster for the White Star Line, in addition to being a disaster in the more famous sense.

[aeonix01]

Wow, y'know, I didn't expect such great answers! It's actually a great learning exercise. Thank you!