SS/RCCL Finances: Improving, Options, Questions??!!

[RetiredandTravel]

14 hours ago, dawntrdr said:

Carnival finished up 7% at 4 pm today and immediately dropped 8.5% in the next 1.5 hours (after hours).  At 4:15 pm it announced a $1.0B offering of common stock.

 

 

Priced

 

https://www.streetinsider.com/Corporate+News/Carnival+Corp.+(CCL)+Prices+102.14M+Share+Offering+at+%249.95sh/20349665.html

[TLCOhio]

10 minutes ago, RetiredandTravel said:

https://www.streetinsider.com/Corporate+News/Carnival+Corp.+(CCL)+Prices+102.14M+Share+Offering+at+%249.95sh/20349665.html

 

YES, sadly, big stock market drops for the cruise stock early this morning at the opening bell.    

 

From the Wall Street Journal's sister publication of Barrons this morning, they had this headline: “Carnival Stocks Tumbles After New Share Sale. What the Market Is Worried About.” with these highlights: “Carnival stock was tumbling Thursday after the company said it would sell $1 billion of new stock just months after raising $1 billion dollars by selling bonds.

Carnival stock has dropped 13% to $9.64 in premarket trading. The company is selling the new shares at $9.95.”

 

At 9:45 am today, Royal Caribbean was down 9.3%.  Big shock to the "system" that is worried about cruise lines diluting their value more and the puzzle for how and when do they pay off ALL of this debt as the world heads into a recession.  

 

Full story at:

https://www.barrons.com/articles/carnival-stock-offering-royal-caribbean-norwegian-51658402200?adobe_mc=MCMID%3D54633612909599303722862007499480498454|MCORGID%3DCB68E4BA55144CAA0A4C98A5%40AdobeOrg|TS%3D1658410618

 

Plus more details from Carnival at: 

https://www.carnivalcorp.com/news-releases/news-release-details/carnival-corporation-plc-announces-offering-common-stock-1

 

THANKS!  Enjoy!  Terry in Ohio

 

Early 2020 (right before Covid shut-down), many visuals and details from New Zealand/South Pacific in going from Auckland to French Polynesia.  This includes Bora Bora, Fiji, NZ experiences, etc:  Live/blog;

https://boards.cruisecritic.com/topic/2735732-live-terryohio-“new”-regatta-south-pacificnz-pix’s/

[highplanesdrifters]

16 hours ago, AmazedByCruising said:

 

@highplanesdrifters Terry is our much appreciated host here, go find another thread hosted by Warren Buffett please.

 

I reported you post.

@AmazedByCruisingI don't understand your post. You quoted @RetiredandTravel.  And besides, we all love Terry, and I believe everyone plays nice in this financial sandbox.

 

Ignore the above, except for the Thanking Terry part. Just read what popped up before while I was typing. No harm no foul.

 

Sorry for the Typo.   Everyone knows Terry is the youngest one here. 😃

Edited July 21, 2022 by highplanesdrifters

[TLCOhio]

On 7/21/2022 at 10:56 AM, highplanesdrifters said:

we all love Terry, and I believe everyone plays nice in this financial sandbox.  Ignore the above, except for the Thanking Terry part. Just read what popped up before while I was typing. No harm no foul.  Sorry for the Typo.   Everyone knows Terry is the youngest one here. 😃

 

Appreciate these above comments and follow-up from highplanesdrifters.  With due respect, not sure that I am the "youngest one" here on these boards.  We can all hope and wish, but as my picture indicates, I have a few "miles" on my body and brain.  Maybe that brings a touch of wisdom and perspective, but there has been some "wear and tear" on my knees, legs, hips, etc., when it comes to do the tasks my wife assigns at home.    

 

From the Wall Street Journal late this afternoon, below are the stock charts for the three major cruise lines.  As the story goes . . . it was a "Tale of Two Cities"!!  Tuesday and Wednesday were up, UP.  Thursday and Friday, down, DOWN!!  Right?

 

It seems that the financial types almost have a "Bi-Polar" outlook on the cruise industry.  Is that a reasonable summary/guess for now?  Clearly, Wall Street did not like Carnival floating another billion dollars worth of stock to water down the company's per share valuation.  

 

THANKS!  Enjoy!  Terry in Ohio

 

Barcelona/Med: June 2011, with stops in Villefranche, ports near Pisa and Rome, Naples, Kotor, Venice and Dubrovnik. Great visuals with key highlights, tips, etc. Live/blog now at 255,074 views.

www.boards.cruisecritic.com/showthread.php?t=1426474

 

 

From the Wall Street Journal Friday, below are the charts of the three major cruise liens for the past week.:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

[rkacruiser]

23 hours ago, TLCOhio said:

It seems that the financial types almost have a "Bi-Polar" outlook on the cruise industry.  Is that a reasonable summary/guess for now?

 

When Morgan Stanley gives a 3 rating on CCL while Morningstar gives it a 1 and 5 Star rating on CCL, no guess, it's the current reality.

 

23 hours ago, TLCOhio said:

I have a few "miles" on my body and brain.  Maybe that brings a touch of wisdom and perspective, but there has been some "wear and tear" on my knees, legs, hips, etc.

 

You are describing me.  And, I hope "I have miles to go before I sleep".  

[crusinbanjo]

15 hours ago, rkacruiser said:

 

You are describing me.  And, I hope "I have miles to go before I sleep".  

I think that description fits many of us, not just the Oracle of Ohio!

[highplanesdrifters]

Don't worry Terry you are not alone in the 'body parts not preforming as we would like' category.

 

With the Feds rate decision due tomorrow time to look at the crazy action in the 10yr.  If this head and shoulders pattern holds it forecasts 10yr at 2%.  I have a hard time believing that forecast, but it is staring me in the face. Ecb went 50bps instead of the expected 25bps last week. Cats sleeping with dogs. Gaps to be filled.🤯

 

At least Bitcoin is dropping. That always makes me happy.

[TLCOhio]

On 7/26/2022 at 10:47 AM, highplanesdrifters said:

Don't worry Terry you are not alone in the 'body parts not preforming as we would like' category.  With the Feds rate decision due tomorrow time to look at the crazy action in the 10yr. 

 

Appreciate this above kind comment and follow-up as all of us are "aging" just a little.  Maybe, hopefully?  Yes, lots is happening this week with the various economic factors, including debates as to whether and if we have officially moved into a recession.  How will this bad economic news affect the cruise lines, their stock values, their abilities to raise more cash to cover the continued losses and higher financing/operating costs?

 

From the Wall Street Journal yesterday, below is their chart for Royal Caribbean.  Big, BIG move up for Royal Caribbean!!  Carnival and Norwegian did not move up yesterday as much.  What will today's stock market do?  Will have full report later today.  

 

THANKS!  Enjoy!  Terry in Ohio

 

From the Wall Street Journal yesterday afternoon, below is their chart that reflected a huge, positive jump up in Royal Caribbean's stock value.  What's next?.:

(Open your screen/viewer wider to see this visual larger/better!)

[TLCOhio]

From various web sources, Royal Caribbean has reported its latest, quarterly financial.  Still losing money, but they are claiming and hoping that profits are supposedly coming soon.  Maybe>  Here was one headline: “Royal Caribbean CEO Jason Liberty on Q2 2022 Results - Earnings Call Transcript.”

 

As I listened and read more, below are various highlights that might be of interest, including: “Royal Caribbean Group today reported a second quarter 2022 net loss of $500 million.”

 

Here was the "spin" from RCL management: "We reached two important milestones in our recovery this quarter – returning our entire global fleet back to operations and delivering positive operating cash flow and EBITDA," said Jason Liberty, president and chief executive officer of Royal Caribbean Group. "Consumers' propensity to travel and cruise remains strong. We continue to see a robust and accelerating demand environment for cruising and on-board spend. Cruising remains a very attractive value proposition for vacationers, and today we have an opportunity to further close the value gap to other land-based vacation offerings," added Liberty. "Our liquidity position remains strong, and we are generating positive operating cash flow and EBITDA. With the fleet back in service, we have the full strength of our platform as we continue to execute on our recovery and build on our capabilities for long-term success."

 

In the company press release, this might be of interest: "As of June 30, 2022, the Group's customer deposit balance was $4.2 billion, a record high for the company. This represents an increase of about $600 million over the previous quarter despite the significant quarter-over-quarter increase in revenue recognition. In the second quarter, approximately 90% of total bookings were new versus FCC redemptions. As of June 30, 2022, the Group's liquidity position was $3.3 billion, which includes cash and cash equivalents, undrawn revolving credit facility capacity, and a $700 million commitment for a 364-day term loan facility. During the second quarter, the Group generated operating cash flow of approximately $0.5 billion. The scheduled debt maturities for the remainder of 2022 are $1.6 billion."

 

Full stories/links at:

https://seekingalpha.com/article/4526937-royal-caribbean-cruises-ltd-rcl-ceo-jason-liberty-on-q2-2022-results-earnings-call-transcript

https://www.cruiseindustrynews.com/cruise-news/27941-royal-caribbean-reports-q2-2022-financial-results-cash-flow-positive.html

 

THANKS!  Enjoy!  Terry in Ohio

 

Norway Coast/Fjords/Arctic Circle cruise from Copenhagen, July 2010, to the top of Europe. Scenic visuals with key tips. Live/blog at 244,665 views.

www.boards.cruisecritic.com/showthread.php?t=1227923

[TLCOhio]

From the Wall Street Journal Wednesday morning, they had this headline: “Everybody Into the Hotel Pool! That’ll Be $200" with this sub-headline:  "Some hotels now charge swimmers and sunbathers to reserve a basic poolside lounge chair, often with few other perks.”

 

Here are some of the story highlights that might be of interest: “Hotels have long tacked pesky fees to guest bills.  Now they’re coming for the lounge chair.  Don’t confuse it with a cushier daybed or cabana, which will set you back $575 or $1,200.  A Las Vegas regular worries novice travelers may think paying a fee to reserve a chair is required, or that they are reserving something more than a lounge chair.”

 

Just as airlines are now charging added fees for the better seats on your flights, some hotels view this tactic as a "creative" way to grow revenue.  

 

Will cruise line adopt this trend?  Hopefully nearly all-inclusive Silversea will not go do this path.  Too greedy?  But, maybe for Royal Caribbean, Carnival and other larger, more mass-market cruise ships?  Reactions?  What other "tricks" can cruise lines use to produce more revenue to restore profits and pay off their debts?

 

Full story at:

https://www.wsj.com/articles/hotel-pool-reservation-fees-lounge-chairs-11658864558?mod=wsjhp_columnists_pos3

 

THANKS!  Enjoy!  Terry in Ohio

 

Sydney to NZ/Auckland Adventure, live/blog 2014 sampling/details with many exciting visuals and key highlights.  On page 23, post #571, see a complete index for all of the pictures, postings.  Now at 237,990 views.

www.boards.cruisecritic.com/showthread.php?t=1974139

 

[highplanesdrifters]

Before you know it they will be charging extra for a bed and pillows.

[TLCOhio]

56 minutes ago, highplanesdrifters said:

Before you know it they will be charging extra for a bed and pillows.

 

Appreciate this above fun humor and follow-up.  Could Silversea be charging extra money in the future for their "pillow menu" of different options?  I like that opportunity to get one of the special foam pillows that fits my hard head well.  Certainly doubt, however, that Silversea would go that direction.   They'll figure out other, creative ways to maximize money from our wallets!! 

 

From the Wall Street Journal late this afternoon, below are the charts for the three major cruise lines and their stock performance during the past five days.  WOW!!  Big upswing for Royal Caribbean on Thursday and Friday after their second quarter financial update.  

 

Carnival and Norwegian did better later this week, but not quite to the same degree upward as for RCL.  

 

The longer-term unknowns are all about how rising interest rates, the economy moving officially into a recession, added fuel/food/staffing costs, etc., impact consumer and their spending flexibility.  What does your shinny Crystal Ball predict?

 

THANKS!  Enjoy!  Terry in Ohio

 

Venice: Loving It & Why??!!  Is one of your future desires or past favorites? See these many visual samples for its great history and architecture.  This posting is now at 97,010 views.

http://boards.cruisecritic.com/showthread.php?t=1278226

 

From the Wall Street Journal this afternoon, below are their charts for the three major cruise line companies during the past week.  Will this trend continue in August?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

[TLCOhio]

From the Reuters newswire and Yahoo News Thursday, they had this headline: “Royal Caribbean's loss narrows as customers splurge onboard.”

 

Here are some of the highlights that might be of interest: “Cruise operator Royal Caribbean Group on Thursday reported a smaller-than-expected quarterly loss as bookings rebounded and travelers splurged on cabanas, spa treatments and watches while onboard.  Onboard spending rose 30% across categories in the second quarter compared to pre-pandemic levels.  Affluent guests have shrugged off inflation to splurge at casinos and spas on the ships, partly making up for the blow from cruise operators' occupancy constraints. Occupancy has not yet returned to pre-pandemic 2019 levels. Royal Caribbean still said the spread of COVID-19 in Europe and Russia's invasion of Ukraine have lowered its occupancy levels on cruises around the continent.”

 

Plan on listening today to the full audio of this conference call, especially the precise questions from the Wall Street financial experts to the RCL management.  

 

Full Reuters story at:

https://finance.yahoo.com/news/royal-caribbean-beats-revenue-estimates-121351686.html

 

THANKS!  Enjoy!  Terry in Ohio

 

Amazon River-Caribbean 2015 adventure live/blog starting in Barbados. Many visuals from this amazing river and Caribbean Islands (Dutch ABC's, St. Barts, Dominica, Grenada, San Juan, etc.).  Now at 70,159 views:

www.boards.cruisecritic.com/showthread.php?t=2157696

 

[highplanesdrifters]

1 hour ago, TLCOhio said:

Cruise operator Royal Caribbean Group on Thursday reported a smaller-than-expected quarterly loss as bookings rebounded and travelers splurged on cabanas, spa treatments and watches while onboard.  Onboard spending rose 30% across categories in the second quarter compared to pre-pandemic levels.  Affluent guests have shrugged off inflation to splurge at casinos and spas on the ships,

This speaks volumes about how much money is still sloshing around out there.

[TLCOhio]

37 minutes ago, highplanesdrifters said:

This speaks volumes about how much money is still sloshing around out there.

 

Agreed with the above statement.  Yes, many with money have seen those accounts grow significantly during the two and a half of years of Covid shut-downs and government money hand-outs, etc.  BUT, many others are living, kind of, paycheck to paycheck.  Yes, there is an economic divide out there.  That is a whole another discussion not for here on the Cruise Cruise boards. 

 

As a sign that the travel game is changing and/or getting more competitive, this below news article might be of interest

 

From the Wall Street Journal this morning, they had this headline: “JPMorgan Is Building a Giant Travel Agent" with this sub-headline: "Need a five-star hotel room or a safari with that checking account? JPMorgan wants to book that for you.”

 

Here are a few of their story highlights: “Chase & Co. wants to be your travel agent.  For the past 18 months, the nation’s biggest bank has been assembling the pieces to launch a full-service travel business.  It bought a booking system, a restaurant review company and a luxury travel agent. It is building its own airport lounges and a force of thousands of travel agents. A new website will launch in the coming months.  Travel has become one of the most important spending categories for banks and credit card issuers.”

 

Interesting development?  What happens next?  Clearly JP Morgan Chase knows that many of its millions of customers have money building up and they would like to help them spend it.  Plus, take a little share of the commission action??  Wonder what travel agency Chase has purchased?  Citibank has a cruise booking travel operation and I get emails and offers from them.  

 

Full story at:

https://www.wsj.com/articles/jpmorgan-is-building-a-giant-travel-agent-11659182401?mod=hp_lead_pos4

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 53,050 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

[highplanesdrifters]

JPMorgan estimates that its customers account for one of every three dollars spent on leisure travel in the U.S., though those customers book only a tiny amount on the Ultimate Rewards website.

 

One out of three? If true, that's a big number.  I'm wondering, where the heck are they going to squeeze in all these airport lounges?

[rkacruiser]

7 hours ago, highplanesdrifters said:

This speaks volumes about how much money is still sloshing around out there.

 

😀         I have never thought of some of my disposable funds to be "sloshing around around out there".  But, I guess the amounts that have been in my ultra-low paying checking account has been doing that for awhile.  With rates rising, some of those "lazy" dollars are going to be put into harness.  

 

But, when I read my second quarter account statements, there is less to "slosh" than there was at the start of 2022.  

 

On 7/29/2022 at 10:21 AM, TLCOhio said:

: "As of June 30, 2022, the Group's customer deposit balance was $4.2 billion, a record high for the company.

 

I wander how that figure could be obtained for CCL and NCLH?  I wonder how much, if any, of that figure represents advance booking deposits and not just deposits for cruises currently booked.  

[rkacruiser]

5 minutes ago, highplanesdrifters said:

JPMorgan estimates that its customers account for one of every three dollars spent on leisure travel in the U.S., though those customers book only a tiny amount on the Ultimate Rewards website.

 

One out of three? If true, that's a big number.  I'm wondering, where the heck are they going to squeeze in all these airport lounges?

 

Agree!  One out of three is a very large number.  (I have contributed to that statistic.)  The Lounges are often already packed, as you know, at prime departure times.  I used to buy a day pass for Sky Clubs if I was not qualified for entry based on my ticket/itinerary.  Enjoyed it; money well spent.  Can't do that anymore!  

[cruiseej]

7 hours ago, rkacruiser said:

But, when I read my second quarter account statements, there is less to "slosh" than there was at the start of 2022.

 

Ignore that June 30 statement; instead look at your results for July — and then pop open the bubbly! 😉 

[TLCOhio]

On 7/30/2022 at 4:47 PM, rkacruiser said:

I wander how that figure could be obtained for CCL and NCLH?  I wonder how much, if any, of that figure represents advance booking deposits and not just deposits for cruises currently booked.  

 

Very good question and follow-up about the customer deposit balances for these other two cruise companies.  My guess?  One of the financial analysits/experts normally asks that type of question during the quarterly review with the top cruise company officials.  If you are the CEO and/or CFO, you do not want to appear "dumb" by just claiming "I don't know!".  Those kind of questions always come up because it is an important cash-flow factor that the Wall Street analysts seek to know and understand.   

 

From a cruise industry trade publication this morning, they had this headline: “Royal Caribbean Group Raising $900 Million to Refinance Debt” with these highlights: “Royal Caribbean announced on Monday that it has commenced a private offering of senior convertible notes to be issued by the company due 2025 in an aggregate principal amount of up to $900 million.  'The purpose of the offering is to replace some of the existing near-term maturities of convertible bonds with new longer-term convertible bonds,' said Naftali Holtz, Chief Financial Officer.  The cruise company said it intends to use the proceeds from the sale of the Convertible Notes to repurchase a portion of its 2.875% convertible senior notes due November 15, 2023 and 4.25% convertible senior notes due June 15, 2023.”

 

Refinancing debt?  Yes, that will be a key "tool" as the cruise lines work to "dig out" of their tangled pile of debt and twisted path during the long recovery process.  And as interest rates keep rising, they need to manage these various fiscal challenges.  Am I missing something important or a different series of factors?  

 

Full story at:

https://www.cruiseindustrynews.com/cruise-news/27967-royal-caribbean-group-raising-900-million-to-refinance-debt.html

 

THANKS!  Enjoy!  Terry in Ohio

 

Kotor/Montenegro:  Various visual samples, tips, details, etc., for this scenic, historic location. Over 49,448 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

[TLCOhio]

In early morning trading on Wall Street, Royal Caribbean's stock had dropped 8.6% as of 9:55 am Monday.  Both Carnival and Norwegian were down, also, but not by that high of a level.  I assume this RCL drop was driven by the announced re-financing move by the money folks at Royal Caribbean.  

 

THANKS!  Enjoy!  Terry in Ohio

[highplanesdrifters]

2 hours ago, TLCOhio said:

The cruise company said it intends to use the proceeds from the sale of the Convertible Notes to repurchase a portion of its 2.875% convertible senior notes due November 15, 2023 and 4.25% convertible senior notes due June 15, 2023.”

I wonder what the refi interest rate was.

[RetiredandTravel]

2 hours ago, highplanesdrifters said:

I wonder what the refi interest rate was.

 

If its a private placement we may never know right?  I'm guessing the yield on a 3 yr straight bond would probably be low teens (maybe less), of course the convert yield would be much lower.  The idea was to start paying the debt not rolling it out but it does give them time which is very important.

[TLCOhio]

1 hour ago, RetiredandTravel said:

If its a private placement we may never know right?  I'm guessing the yield on a 3 yr straight bond would probably be low teens (maybe less), of course the convert yield would be much lower.  The idea was to start paying the debt not rolling it out but it does give them time which is very important.

 

Great question and follow-up as to if and how this is a "private placement" for this nearly billion dollar re-finance effort.  

 

From the respected Bloomberg News and Yahoo News later this morning, they had this headline: “Royal Caribbean Shares Plunge After $900 Million Note Offering.”

 

Here are a few of their reporting highlights: “Shares of Royal Caribbean Cruises Ltd. are down 10% Monday after the company launched a private offering for as much as $900 million in senior convertible notes to be used to buy back existing debt.  News of the offering sent peers Carnival Corp. and Norwegian Cruise Line Holding Ltd. lower as well.  Royal Caribbean doesn’t have much of a choice. The company is 'in most urgent need' of additional equity if it can’t raise debt, Alex Brignall of Redburn told clients after Carnival’s stock offering announcement.”

 

Nothing in this story gives added details and specific pricing.  Clearly, RCL is both in need of more money and now is not the ideal time to be seeking cheap, added cash-flow.  As of 3:20 pm ET Monday, RCL was down 9.00% to $35.175.  

 

Full story at:

https://finance.yahoo.com/news/royal-caribbean-shares-plunge-900-142716486.html

 

THANKS!  Enjoy!  Terry in Ohio

 

Dubrovnik!  Visual samples, tips, details, etc., for this super scenic and historic location. Over 48,918 views.    

http://boards.cruisecritic.com/showthread.php?t=1439227

[RetiredandTravel]

14 minutes ago, TLCOhio said:

 

Great question and follow-up as to if and how this is a "private placement" for this nearly billion dollar re-finance effort.  

 

From the respected Bloomberg News and Yahoo News later this morning, they had this headline: “Royal Caribbean Shares Plunge After $900 Million Note Offering.”

 

Here are a few of their reporting highlights: “Shares of Royal Caribbean Cruises Ltd. are down 10% Monday after the company launched a private offering for as much as $900 million in senior convertible notes to be used to buy back existing debt.  News of the offering sent peers Carnival Corp. and Norwegian Cruise Line Holding Ltd. lower as well.  Royal Caribbean doesn’t have much of a choice. The company is 'in most urgent need' of additional equity if it can’t raise debt, Alex Brignall of Redburn told clients after Carnival’s stock offering announcement.”

 

Nothing in this story gives added details and specific pricing.  Clearly, RCL is both in need of more money and now is not the ideal time to be seeking cheap, added cash-flow.  As of 3:20 pm ET Monday, RCL was down 9.00% to $35.175.  

 

Full story at:

https://finance.yahoo.com/news/royal-caribbean-shares-plunge-900-142716486.html

 

THANKS!  Enjoy!  Terry in Ohio

 

Dubrovnik!  Visual samples, tips, details, etc., for this super scenic and historic location. Over 48,918 views.    

http://boards.cruisecritic.com/showthread.php?t=1439227

 

This appears to be a situation that favors the buyer over the seller and we don't know exactly what the structure of the private placement is to induce buyers.  We don't know the structure but somebody does.  🙄

 

 Even at 35 1/2 its above its recent lows.