Item 1.01 Entry into a Material Definitive
Agreement.
10.875% Senior Secured Notes due
2023 and 11.500% Senior Secured Notes due 2025
On May 19, 2020, Royal
Caribbean Cruises Ltd. (the “Company”) completed its previously announced private offering of two series of senior
secured notes in an aggregate principal amount of $3.32 billion, consisting of $1.0 billion of 10.875% Senior Secured Notes due
2023 (the “2023 Notes”) and $2.32 billion of 11.500% of Senior Secured Notes due 2025 (the “2025 Notes,”
together with the 2023 Notes, the “Notes”). The Company received net proceeds from the offering of approximately $3.2
billion (after deducting fees, commissions and expenses), which it intends to use to repay in full its $2.35 billion 364-day senior
secured term loan agreement with Morgan Stanley Senior Funding, Inc., as the administrative agent and collateral agent and the
other lenders party thereto entered into on March 23, 2020. The Company expects to use the remainder of such net proceeds for general
corporate purposes, which may include repayment of additional indebtedness.
The Notes were issued
by the Company pursuant to an indenture, dated May 19, 2020 (the “Indenture”), among the Company, the guarantors named
therein, and The Bank of New York Mellon Trust Company, N.A., as trustee, principal paying agent, transfer agent, registrar and
security agent.
Interest on the Notes
accrues from May 19, 2020 and is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15,
2020, at a rate of 10.875% per year, in the case of the 2023 Notes, and 11.500% per year, in the case of the 2025 Notes. The 2023
Notes will mature on June 1, 2023 and the 2025 Notes will mature on June 1, 2025, in each case unless earlier redeemed or repurchased.
The Notes are fully
and unconditionally guaranteed on a senior secured basis by Celebrity Cruises Holdings Inc., Celebrity Cruises Inc., and certain
of the Company’s wholly-owned vessel-owning subsidiaries. The Notes and the related guarantees will be secured by first-priority
security interests in the collateral (which generally includes certain of the Company’s material intellectual property, including
rights in certain of the Company’s marketing databases, customer data and customer lists, a pledge of 100% of the equity
interests of certain of the Company’s wholly-owned vessel-owning subsidiaries, the collateral account established pursuant
to the Indenture, mortgages on the 28 vessels owned by such subsidiaries and an assignment of insurance and earnings in respect
of such vessels, subject to permitted liens and certain exclusions and release provisions). Pursuant to the terms of the Indenture,
the obligations under the Notes and the related guarantees will be secured by the collateral in an amount not to exceed permitted
capacity under the Company’s existing indebtedness.
The Company may, at
its option, redeem, at any time and from time to time prior to March 1, 2023 (the date that is three months prior to the maturity
date of the 2023 Notes) (the “2023 Notes Par Call Date”), some or all of the 2023 Notes at 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the redemption date plus the applicable “make-whole premium” described
in the Indenture. On or after the 2023 Notes Par Call Date, the 2023 Notes will be redeemable, at the Company’s option, in
whole or in part, at a redemption price equal to 100% of the principal amount of the 2023 Notes to be redeemed plus accrued and
unpaid interest, if any, to, but excluding, the redemption date.
The Company may, at
its option, redeem at any time and from time to time prior to June 1, 2022, some or all of the 2025 Notes at 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the redemption date plus the applicable “make-whole premium”
described in the Indenture. On or after June 1, 2022, the Company may, at its option, redeem at any time and from time to time,
some or all of the 2025 Notes at the applicable redemption prices set forth in the Indenture. In addition, on or prior to June
1, 2022, the Company may, at its option, redeem up to 40% of the 2025 Notes with the proceeds from certain equity offerings at
the redemption price listed in the Indenture.
In addition, the Company
may redeem all, but not part, of the Notes upon the occurrence of specified tax events set forth in the Indenture.
The Indenture contains
covenants that limit the ability of the Company and its restricted subsidiaries to, among other things: (i) consummate certain
asset sales, (ii) pay dividends or distributions on, or redeem or repurchase, equity interests and make other restricted payments,
(iii) make certain investments, (iv) create or assume certain liens, (v) consolidate, merge or transfer all or substantially all
of their assets, (vi) engage in certain transactions with affiliates, and (vii) designate restricted and unrestricted subsidiaries.
In addition, upon the occurrence of specified change of control triggering events, the Company may be required to offer to repurchase
the Notes at a repurchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but
excluding, the repurchase date. The Indenture also contains customary events of default.
The Notes and related
guarantees were offered and sold in a private offering that was exempt from the registration requirements of the Securities Act
of 1933, as amended (the “Securities Act”). The Notes and related guarantees were offered within the United States
only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act
and outside the United States only to non-U.S. investors in accordance with Regulation S under the Securities Act. The Notes and
related guarantees have not been registered under the Securities Act or the securities laws of any other jurisdiction. Unless so
registered, the Notes and related guarantees may not be offered or sold in the United States except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
The Indenture (which
includes the form of 2023 Notes and 2025 Notes) is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated
herein by reference. The above descriptions of the material terms of the Indenture and Notes are qualified in their entirety by
reference to such exhibit.