Royal Caribbean: 'No assurance' we'll be able to finance Oasis of the Seas

mercedes · February 27, 2009

With just nine months to go until Royal Caribbean is scheduled to take delivery of the world's largest cruise ship, the much-ballyhooed Oasis of the Seas, financing to pay for the $1.2 billion vessel remains in doubt, the company said Tuesday in a regulatory filing.

"Although we believe that we will be able to (finance the ship), there can be no assurance that we will be able to do so or that we will be able to do so on acceptable terms," the company warned in its annual 10-K filing with the U.S. Securities and Exchange Commission.

The 5,400-passenger vessel, which has been under construction in Finland for several years, is scheduled to be delivered to Royal Caribbean in November.

Royal Caribbean noted it has commitments for government financing guarantees from Finnvera, the export credit agency of Finland, for 80% of the financed amount of Oasis and a sister ship also under construction, Allure of the Seas. But it has yet to line up actual financing for the vessels.

"The disruption in the credit markets has resulted in a lack of liquidity worldwide (that) may affect our ability to successfully raise capital or to do so on acceptable terms," the company warned.

Royal Caribbean noted credit rating agencies Standard & Poors and Moody's both have lowered its credit rating over the past year, and cash flow at the company is under pressure due to the decrease in consumer cruise spending as a result of the current economic climate.

"These factors may prevent us from having sufficient available capital or financing to meet our needs or to do so on acceptable terms," the company said. "There is no assurance that our credit ratings will not be lowered further. The lowering of our credit ratings may increase our cost of financing and can make it more difficult for us to access the financial markets."

coloradocruisers · February 27, 2009

Well I hope they can pull the financing together. It would be a shame to see an 80% complete hulk of the largest cruise ship yet sitting idle in the shipyard. :sad2:

JoeyandDavid · February 27, 2009

I think they will "find acceptable financing " somewhere.. I may be wrong... but i tend to believe this story is CYA in nature

coloradocruisers · February 27, 2009

And their next challenge will be to fill it, in this economy. That's alot of staterooms to fill up week in and week out...

JoeyandDavid · February 27, 2009

And their next challenge will be to fill it, in this economy. That's alot of staterooms to fill up week in and week out...

you have got that right..... it will be interesting to see how they accomplish this..

sailingrose · February 27, 2009

I keep finding more an more people that are booking it.........Not my cup of tea. I'm sure they will find the financing......if they don't it could be the end on the line...........

JoeyandDavid · February 27, 2009

I keep finding more an more people that are booking it.........

do you thats great news!!

JoeyandDavid · March 4, 2009

Celebrity just got financing for the 4th Solstice-class ship which is scheduled for delivery in the third quarter of 2011.. so no doubt RCL will acquire what they need as well

DebbieandJerry · March 4, 2009

Right now, a ship as big as the Oasis is not appealing to me. Besides, when you look at the cost of what Royal is asking for a 7-day Caribbean on the Oasis vs. the cost on any other line, it's unreal. But, good for them for being able to sell their cabins.