Royal Caribbean Lines Up A $3 Billion, 364-Day Loan For Its Sandals Stake
The cruise operator's 10-Q shows a one-year Morgan Stanley bridge behind the deal, with $2.2 billion of debt due within a year.
Royal Caribbean Group, the cruise operator behind the Royal Caribbean, Celebrity Cruises and Silversea brands, will pay approximately $3.0 billion for a 50% stake in Sandals and Beaches Resorts, and a $3 billion loan that matures 364 days after funding stands behind the purchase, according to its 10-Q filed Tuesday. The deal is expected to close in early 2027.
A bridge that must be refinanced
Morgan Stanley Senior Funding provides the facility, and Royal Caribbean can draw it only at closing. Once drawn, it carries interest at SOFR, a benchmark rate, plus 1.00% to 1.50%, depending on the company's senior debt rating.
The filing calls the loan a source of "funding certainty, if needed, until we complete the permanent financing for the acquisition." The company expects to account for the stake under the equity method, meaning it books its share of Sandals' earnings rather than consolidating the business. The prior quarter's 10-Q carried no Sandals language.
In its earnings release the same day, the company said the stake covers 18 resorts across the Caribbean plus three under development.
Bills due while the loan sits ready
Obligations due through September 30, 2027 are $2.2 billion of debt maturities, $1.1 billion of interest and $2.7 billion of ship progress payments, the filing says. The company reported scheduled 2027 maturities of $2.4 billion in its release.
The company also keeps returning cash. In the first nine months it paid $1,075 million in dividends and spent $1,035 million on buybacks, with $805 million left on a $2 billion repurchase authorization. Liquidity stood at $7.4 billion, including $6.6 billion of undrawn revolving credit.
Ships on order carry an aggregate expected cost of about $19.4 billion, of which the company had deposited $1.5 billion.
Financing and the quarter
In August the company issued $1.25 billion of 5.550% notes due 2034 and used the proceeds to repay $1.0 billion of floating-rate term loans and $250 million of 2027 notes. In October it signed a $400 million five-year delayed-draw loan with Export Development Canada.
Third-quarter revenue rose to $5.6 billion from $5.1 billion a year earlier, and net income attributable to the company was $1.7 billion. The company raised full-year adjusted earnings per share guidance to a range of $17.85 to $17.95. It said higher fuel costs partly offset the stronger quarter.
The company's market value was $75.0 billion in Tuesday's report.
The company said the expected contribution from Sandals and Beaches will be folded into its 2027 guidance upon closing, which it expects in early 2027.
Sources
- 10-Q Filing — Royal Caribbean (RCL) — SEC EDGAR
- 10-Q Filing — Royal Caribbean (RCL), Q2 FY2026 filed 2026-07-28 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, a2026q3earningsrelease.htm) — Royal Caribbean, filed 2026-10-27 — SEC EDGAR
- Royal Caribbean Shares Up After Strong Profit Report — The Wall Street Journal
- Royal Caribbean CEO Jason Liberty on Q3 earnings beat: We're seeing an uptick in bookings — CNBC
- Royal Caribbean Tops Buy Point On Bullish Outlook. There's One Chart Factor To Watch. | Investor's Business Daily — investors.com
- Royal Caribbean: Q3 Earnings Snapshot — Associated Press
- Royal Caribbean reports strong results for third quarter: Travel Weekly — travelweekly.com
