Royal Caribbean Cruises Ltd. launched a private offering of $1.0 billion of senior-secured eight-year bonds on Thursday, tapping the high-yield bond market for the first time in 2024.
Proceeds of the deal will be used along with cash on hand and/or borrowings under the cruise operator’s revolving credit facilities to repay more expensive debt, namely all of its outstanding 11.625% notes due 2027.
The announcement comes just hours after Royal Caribbean
RCL,
raised its earnings guidance for the year, citing “accelerating demand” and a strong start to the year. That’s after it reported fourth-quarter profit and guidance that were better than Wall Street expected in early February, citing record bookings to start the Wave season.
“The company continues to be very encouraged about the demand and pricing environment for 2024,” Royal Caribbean said. “Bookings have been significantly higher than during the same period last year.”
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For 2024, all four quarters and all key products are booked ahead of the same time last year in both rate and volume, the company said. Consumer spending onboard also continues to exceed prior years “driven by greater participation at higher prices, indicating quality and healthy future demand.”
“Since our last earnings call, robust demand for our vacation experiences has significantly exceeded our initial expectations,” Chief Executive Jason Liberty said in a statement.
The stock was up 5% premarket and has gained 61% in the last 12 months, outperforming the S&P 500
SPX,
which is up 25%.
Related: Carnival’s stock is having a record year as cruise demand keeps increasing
