Finnish Trade Backs Royal Caribbean Cruiseliner Loan (RCL)

By Douglas A. McIntyre Updated Apr 27, 9:23PM EDT · Published Apr 15, 8:50AM EDT

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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

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.