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