fstuff1 Posted March 28, 2020 #1 Share Posted March 28, 2020 https://www.fool.com/investing/2020/03/23/royal-caribbean-takes-out-a-new-22-billion-loan.aspx from the article, they had $1.4B in the bank. now they have $3.6B. Why the need to draw on that credit now and pay interest when they have plenty cash on hand? and why ALL of it in 1 shot? Link to comment Share on other sites More sharing options...
nolimits Posted March 28, 2020 #2 Share Posted March 28, 2020 Probably afraid bank would pull back loan or change limits with no bailout from US and no immediate end in sight to the shutdown of cruising 2 Link to comment Share on other sites More sharing options...
yogimax Posted March 28, 2020 #3 Share Posted March 28, 2020 Not weeks... not months... but years before the cruise lines return to profitability, Meanwhile, costs continue each month. That $2.2 Billion seems like a lot now but it will disappear well before a profit is made. 1 Link to comment Share on other sites More sharing options...
mugtech Posted March 28, 2020 #4 Share Posted March 28, 2020 1 hour ago, fstuff1 said: https://www.fool.com/investing/2020/03/23/royal-caribbean-takes-out-a-new-22-billion-loan.aspx from the article, they had $1.4B in the bank. now they have $3.6B. Why the need to draw on that credit now and pay interest when they have plenty cash on hand? and why ALL of it in 1 shot? They owe me over $10,000 from cancelled cruises. There may be others out there. Hope we get our refunds before they run out of cash. They will have no income for the next 6 weeks, probably longer, and plenty of expenses. More will be cancelling as final payment dates for July cruises will generate more refunds. How long will $3.6B last? Guess only time will tell. 2 Link to comment Share on other sites More sharing options...
ONECRUISER Posted March 28, 2020 #5 Share Posted March 28, 2020 (edited) 1 hour ago, mugtech said: They owe me over $10,000 from cancelled cruises. There may be others out there. Hope we get our refunds before they run out of cash. They will have no income for the next 6 weeks, probably longer, and plenty of expenses. More will be cancelling as final payment dates for July cruises will generate more refunds. How long will $3.6B last? Guess only time will tell. We'll get our refunds and ships will be sailing again before money runs out. Edited March 28, 2020 by ONECRUISER 1 Link to comment Share on other sites More sharing options...
drsel Posted March 28, 2020 #6 Share Posted March 28, 2020 https://www.fool.com/investing/2020/03/23/royal-caribbean-takes-out-a-new-22-billion-loan.aspx from the article, they had $1.4B in the bank. now they have $3.6B. Why the need to draw on that credit now and pay interest when they have plenty cash on hand? and why ALL of it in 1 shot?Haven't interest rates have been reduced to 0% Link to comment Share on other sites More sharing options...
grandgeezer Posted March 28, 2020 #7 Share Posted March 28, 2020 27 minutes ago, drsel said: 4 hours ago, fstuff1 said: https://www.fool.com/investing/2020/03/23/royal-caribbean-takes-out-a-new-22-billion-loan.aspx from the article, they had $1.4B in the bank. now they have $3.6B. Why the need to draw on that credit now and pay interest when they have plenty cash on hand? and why ALL of it in 1 shot? Haven't interest rates have been reduced to 0% Someone, somewhere posted the details of the loan on this website. If I remember right, it started at 2.5% for the first several months and topped out at 2.75% later. Even with no interest rate that comes to $184,000,000 per month. This is new debt, add whatever else they owe and the number to be paid is mind blowing. They can raise more cash by suspending their stock dividend which amounts to about $160,000,000 per quarter. Link to comment Share on other sites More sharing options...
drsel Posted March 28, 2020 #8 Share Posted March 28, 2020 In addition to zero dividend, maybe they can raise fresh equity by a rights issue or issue of preference shares. Then there is no interest to be paid, nor repayment required. Link to comment Share on other sites More sharing options...
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