Finnish Trade Backs Royal Caribbean Cruiseliner Loan (RCL)

If you think it is hard to get a personal unsecured loan right now, imagine the difficulty in getting a loan for a giant cruise liner in the midst of a recession.  This morning we saw an announcement from Royal Caribbean Cruises Ltd. (NYSE: RCL) that the cruise operator had arranged unsecured financing for $1.05 billion or 80% of the contract price of the company’s OASIS OF THE SEAS ship.

The notion that this is unsecured seems odd until you see who is backing this.  Finnvera, the official export credit agency of Finland, is guaranteeing 95% of the facility.

BNP Paribas, Nordea Bank and SEB have all given committments for 20% of the facility each in a 12-year amortized loan, and each may opt out in 6 years.  The other 40% is being funded by Finnish Export Credit Ltd.

Without being too cynical, it sounds like the Finns are investing in their own shipbuilding industry.  A brief look says that this 5,400-person capacity and 16-deck ship is being built by Aker Yards…. in Finland.  Stimulus and assistance packages from governments and export agencies aren’t anything new.

We had the size of its fleet at 38 cruise ships with almost 79,000 berths at the end of 2008.  Royal Caribbean shares are up 3% at $11.11 shortly after the open.  Its 52-week trading range is $5.40 to $35.15.

JON C. OGG