Royal Caribbean Cruises Ltd. (NYSE: RCL) has taken a significant strategic step forward with the recent entry into a material definitive credit agreement to finance its sixth Edge-class ship, scheduled for delivery in Q4 2028. This move underscores Royal Caribbean’s commitment to expanding its fleet and enhancing its market position in the competitive cruise industry.
The credit agreement, finalized on June 25, 2025, provides a U.S. dollar-denominated term loan fully guaranteed by BpiFrance Assurance Export, the official export credit agency of France. The loan will amortize semi-annually over a 12-year period post-delivery, with interest accruing at a floating rate of Term SOFR plus 0.85% per annum. This financing structure offers Royal Caribbean attractive borrowing terms, reflecting the company’s strong creditworthiness and strategic partnerships.
From a financial perspective, Royal Caribbean reported total revenues of approximately \(16.49 billion for the fiscal year 2024, with a robust net income of \)2.88 billion, reflecting an operating margin of 27.22% and a return on assets of 12.18%. The company’s total liabilities stood at \(29.34 billion, with long-term debt accounting for \)18.47 billion, resulting in a conservative debt-to-equity ratio of 0.3753. Capital expenditures for the year were $3.27 billion, highlighting ongoing investments in fleet expansion and maintenance.
The new credit facility aligns with Royal Caribbean’s historical financing strategy, which has leveraged export credit agency (ECA) funding to support its new build program. As noted in previous earnings calls, the company has benefited from ECA partnerships for over a decade, enabling favorable financing terms for ship construction and related expenditures. CFO Naftali Holtz emphasized, “The ECAs have been fantastic partners to us. We’re obviously very committed to our new build program, and they provide us very attractive financing.” CEO Jason Liberty added, “The concept of 80-20 financing, with 20% down and 80% financed, has been a cornerstone of our ship financing strategy.”
Segment-wise, Royal Caribbean’s FY 2024 revenue was driven primarily by cruise itinerary sales totaling approximately \(10.59 billion, supported by passenger ticket revenues and other onboard services. Operating expenses included fuel costs of \)1.16 billion, payroll expenses of \(1.3 billion, and port costs of \)1.1 billion, reflecting the operational scale and complexity of the cruise business.
Looking ahead, the financing of the sixth Edge-class ship is expected to enhance Royal Caribbean’s capacity and competitive edge in the luxury cruise segment. The company’s disciplined capital allocation and strong balance sheet position it well to manage the long-term debt associated with this investment while continuing to deliver shareholder value.
This development comes amid a broader industry context of economic uncertainty, fluctuating fuel prices, and evolving consumer preferences, where Royal Caribbean’s strategic investments and financial prudence are critical to sustaining growth and profitability.
For further details, the full 8-K report can be accessed here: Royal Caribbean Cruises Ltd. 8-K Report.
Tags: RCL, Royal Caribbean Cruises Ltd, FY 2024, EdgeClassShipFinancing, ExportCreditAgency, CruiseIndustryFinance