Total revenue in the three months ended March 31 dropped 16.7% to $2 billion, according to preliminary figures. A prolonged suspension of operations is estimated to incur cash burn of about $250 million to $275 million per month. It will also write down the value of its Silversea Cruises unit and a number of ships by $1 billion to $1.3 billion. The cruise operator disclosed that it expects to post a preliminary first-quarter net loss of $1.44 billion versus a profit of $249.7 million year-on-year. Moody’s slashed Royal Carribean’s credit rating by two notches to Ba2 into junk territory with a negative outlook due to its suspended operations and in expectation of a slow recovery even when cruise activity will resume. “The incremental $1 billion will bolster the company's liquidity position and ensure the company can get through the next year even with operations remaining suspended,” Moody’s Investors Service said in a report. The proceeds of the $3.3 billion secured note issuance will be used to refinance the cruise operator’s existing $2.4 billion 364-day secured facility that matures in March 2021 with the balance being held for liquidity purposes.
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The embattled cruise operator is offering series of notes due 20, which will be secured by 28 of the company's vessels, it said in a SEC filing. Royal Caribbean Cruises ( RCL) is planning to raise $3.3 billion from a bond sale as the ailing cruise operator struggles with the financial fallout of the coronavirus-related travel restrictions which brought its operations to an almost complete halt.
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