Not that we were worried, but Royal Caribbean Cruise Lines (RCCL) has announced that it has commitments for $1.05 billion, or 80 percent, of the contract price for the world's largest cruise ship, the 220,000-ton, 5,400-passenger Oasis of the Seas. The remaining 20 percent is being paid through an arrangement between RCCL and the shipyard, STX Europe.
As we reported in March, Royal Caribbean was negotiating with the Finnish government to secure a stronger loan agreement. And indeed, a better arrangement has been reached. Finnvera, an export credit agency owned by the Finnish government, will now guarantee 95 percent of the $1.05 billion. In the previous arrangement, only 80 percent was guaranteed.
Moreover, where previously the Finnish government was simply guaranteeing the loans, it will now provide actual funding for 40 percent of the $1.05 billion. Two Swedish banks and one French bank will each provide 20 percent. Topi Vesteri, executive vice president of Finnvera, tells us that it's been over a decade since the Finnish government put direct funding in an export credit agreement. But with the current financial crisis, Finland has set up a temporary scheme for directing funding of export credit transactions.
While the agreement is subject to customary closing procedures, Vesteri notes, "Everyone is committed, banks, Finnvera, RCCL." The new arrangement, however, does not include Allure of the Seas, financing for which will be dealt with at a later date.
Oasis of the Seas will debut in December.
--by Dan Askin, Associate Editor
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Oasis of the Seas: Financing Secure for New Cruise Ship
April 15, 2009