Oasis of the Seas Update

Royal Caribbean: 'No assurance' we'll be able to finance Oasis of the Seas

By Gene Sloan, USA TODAY

With just nine months to go until Royal Caribbean
is scheduled to take delivery of the world's largest cruise ship, the
much-ballyhooed Oasis of the Seas, financing to pay for the $1.2
billion vessel remains in doubt, the company said Tuesday in a
regulatory filing."Although we believe that we will be able to
(finance the ship), there can be no assurance that we will be able to
do so or that we will be able to do so on acceptable terms," the
company warned in its annual 10-K filing with the U.S. Securities and
Exchange Commission.

The 5,400-passenger vessel, which has been under construction in Finland
for several years, is scheduled to be delivered to Royal Caribbean in
November.

Royal Caribbean noted it has commitments for government financing
guarantees from Finnvera, the export credit agency of Finland, for 80%
of the financed amount of Oasis and a sister ship also under
construction, Allure of the Seas. But it has yet to line up actual
financing for the vessels.

"The disruption in the credit markets has resulted in a lack of liquidity
worldwide (that) may affect our ability to successfully raise capital or
to do so on acceptable terms," the company warned.

Royal Caribbean noted credit rating agencies Standard & Poors and
Moody's both have lowered its credit rating over the past year, and
cash flow at the company is under pressure due to the decrease in
consumer cruise spending as a result of the current economic climate.

"These factors may prevent us from having sufficient available capital
or financing to meet our needs or to do so on acceptable terms," the
company said. "There is no assurance that our credit ratings will not
be lowered further. The lowering of our credit ratings may increase our
cost of financing and can make it more difficult for us to access the financial markets."

Report Link: http://content.usatoday.com/topics/post/Organizations/Companies/Transportation,+Travel,+Hospitality/Cruise+Lines/Royal+Caribbean/63337569.blog/1

WOW!

Thats too bad,but in this day and age,no big surprise...........hope they can work it all out..

It's my guess that they will proceed and they will figure out financing somehow - otherwise, who else is going to purchase a 220,000 ton cruise ship? The ship yard won't be able to absorb that loss.

Not only that, how about the various countries such as Jamaica that specifically built docking facilities for Oasis. It's going to be interesting to find out what actually happens.

This appears to be based on a 10-K from 2008.

The stock was up 21% yesterday and is up a bit over 2% today as of this posting. Obviously no major market movers feel this is news. Again, you can look at the 10-K from ANY company and type up a similar scare article. This is not to say that RCL is not facing very difficult times ,they are.The major problem will be filling the ships at a price where they can be profitable.

cruzinmama wrote:

This appears to be based on a 10-K from 2008.

The stock was up 21% yesterday and is up a bit over 2% today as of this posting. Obviously no major market movers feel this is news. Again, you can look at the 10-K from ANY company and type up a similar scare article. This is not to say that RCL is not facing very difficult times ,they are.The major problem will be filling the ships at a price where they can be profitable.

I totally agree. This wasn't newsworthy from what I understand, USA Today must have been having a slow news day...or Gene was grasping for a story.

On that 10-K, they are required to list everything and anything that could possibly go wrong. So it's not unusual for them to say that.

I am not surprised with the financial conditions that are affecting at this time. My concern how will this affect the pricing for the ship?.

I have noticed that I booked a balcony (oceanview) a month ago. My Duaghter just booked a cabin 2 doors down, and hers is already $200 more than ours.

Michele, I agree, it must have been a slow news day, and Gene was pressured by a deadline.....

it's easy for the stock to be up 21% when it's only $6 share. how about when i bought it at $35? LOL

Note to self...buy cruise insurance....from a separate provider.....
You just never know what is going to happen.