Royal Caribbean Cruise Lines 2009 Annual Report Download - page 89

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ROYAL CARIBBEAN CRUISES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
During 2009, we arranged commitments for unsecured financing in the amount of $1.1 billion or up to 80% of the contract price
of Allure of the Seas. The facility will be 95% guaranteed by Finnvera, the official export credit agency of Finland and will be funded
at delivery. The loan will have a 12-year life with semi-annual amortization and the lenders have the ability to opt-out after seven
years. We have an option of a floating or fixed rate of interest. We will be required to secure Allure of the Seas if at the time we draw
down on our loan to purchase the vessel our senior debt is rated below BB- by Standard & Poor’s or below Ba3 by Moody’s. The
commitments are subject to customary funding conditions.
During 2009, we entered into a credit agreement based on terms originally agreed to in June 2007 providing financing for
Celebrity Silhouette which is scheduled for delivery in the third quarter of 2011. The credit agreement provides for an unsecured term
loan for up to 80% of the purchase price of the vessel which will be 95% guaranteed by Hermes, the official export credit agency of
Germany and will be funded at delivery. The loan will have a 12-year life with semi-annual amortization, and will bear interest at a
fixed rate of 5.82% (inclusive of the applicable margin).
Under certain of our agreements, the contractual interest rate and commitment fee vary with our debt rating. During 2009, our
senior debt credit rating was lowered to BB- with a negative outlook by Standard and Poor’s and to Ba3 with a negative outlook by
Moody’s (our corporate credit rating is Ba2 with a negative outlook). The cumulative impact to interest expense in 2009 as a result of
these downgrades was not material to our results of operations.
The unsecured senior notes and senior debentures are not redeemable prior to maturity.
Our financing agreements contain covenants that require us, among other things, to maintain minimum net worth and a fixed
charge coverage ratio and limit our net debt-to-capital ratio. Our minimum net worth and maximum net debt-to-capital calculations
exclude the impact of accumulated other comprehensive income (loss) on total shareholders’ equity. The fixed charge coverage ratio
is calculated by dividing net cash from operations for the past four quarters by the sum of dividend payments plus scheduled principal
debt payments in excess of any new financings for the past four quarters (“fixed charges”). We are currently in compliance with all
debt covenants. As of December 31, 2009, our net worth was $7.3 billion compared with a minimum requirement of $5.2 billion, our
net-debt-to-capital was 52.7% compared to a maximum limit of 62.5% and our fixed charge coverage ratio exceeded the minimum
requirement of 1.25x as our fixed charges for the period were $0.00.
Following is a schedule of annual maturities on long-term debt including capital leases as of December 31, 2009 for each of the
next five years (in thousands):
Note 8. Shareholders’ Equity
We declared cash dividends on our common stock of $0.15 per share in the first three quarters of 2008 and each of the quarters
of 2007. Commencing in the fourth quarter 2008 our board of directors discontinued the quarterly dividends.
F-16
Year
2010
$756,215
2011
1,056,081
2012
1,103,833
2013
1,278,561
2014
1,822,917
Thereafter
2,402,163
$8,419,770