Cruise operator Royal Caribbean Group raised $650mn via 5Y bonds at a yield of 4.25%, unchanged from initial guidance. The bonds have been rated B by S&P. Proceeds of the deal will be used to fund the redemption of its ~$620mn 7.25% 2025s issued by Silversea Cruise Finance Ltd and for general corporate purposes. S&P has assigned a recovery rating of 4 to the new issue indicating an expectation of 30-50% recovery in the event of a default. The credit agency said, “Despite sufficient liquidity and Royal’s recent gradual resumption of operations, we continue to believe substantial uncertainty remains as to Royal’s ultimate recovery path,” and added “risks remain about Royal’s ability to ramp up EBITDA generation through 2022 to support material deleveraging and drive sufficient cash flow to partly address large calls on cash in 2022.”

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