Royal Caribbean Cruises (RCL)

Note 4. Long-Term Debt

In February 2009, we entered into a credit agreement based on terms originally agreed in June 2007 providing financing for our fourth Solstice-class ship, which is scheduled for delivery in the third quarter of 2011. The credit agreement provides for an unsecured term loan for up to 80% of the purchase price of the vessel. The loan will have a 12-year life with semi-annual amortization, and will bear interest at a fixed rate of 5.82% (inclusive of the applicable margin).

Our debt agreements contain covenants that require us, among other things, to maintain minimum net worth and fixed charge coverage ratio and limit our net debt-to-capital ratio. We are in compliance with all covenants as of March 31, 2009.

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Note 8. Long-Term Debt

Long-term debt consists of the following (in thousands):

During 2008, we borrowed $530.0 million under an unsecured term loan due through 2015. The loan bears interest of approximately 5.40% at December 31, 2008. The proceeds were used towards the purchase of Independence of the Seas, which was delivered in April 2008.

During 2008, we borrowed $519.1 million under an unsecured term loan due through 2020. The loan bears interest of approximately 4.28% at December 31, 2008. The proceeds were used towards the purchase of Celebrity Solstice, which was delivered in October 2008.

Under certain of our agreements, the contractual interest rate and commitment fee vary with our debt rating. During 2008, our credit rating was lowered from BBB- with a negative outlook to BB with a negative outlook by Standard and Poor’s. In January 2009, Standard and Poor’s placed our credit rating on credit watch with negative implications. In addition, our credit rating was lowered from Ba1 with a stable outlook to Ba2 with a negative outlook by Moody’s.

The unsecured senior notes and senior debentures are not redeemable prior to maturity.

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Our debt agreements contain covenants that require us, among other things, to maintain minimum net worth and fixed coverage ratio and limit our net debt-to-capital ratio. We are in compliance with all covenants as of December 31, 2008. Following is a schedule of annual maturities on long-term debt as of December 31, 2008 for each of the next five years (in thousands):

Long-Term Debt

The fair values of our senior notes and senior debentures were estimated by obtaining quoted market prices. The fair values of all other debt were estimated using the present value of expected future cash flows.

Note 4. Long-Term Debt

In April 2008, we drew in full the $530.0 million available under an unsecured term loan due through 2015. The loan currently bears interest at LIBOR plus a weighted average margin of 1.01%; the rate was approximately 3.72% at September 30, 2008. The proceeds were used towards the purchase of Independence of the Seas, which was delivered in April 2008.

In August 2008, we entered into a U.S. dollar unsecured term loan due through 2020 in an amount not to exceed the U.S. dollar equivalent of €412.0 million. In October 2008, we drew $519.1 million, the full amount available under this unsecured term loan. The loan bears interest at LIBOR plus 0.45%; the rate is currently 4.28%. The proceeds were used towards the purchase of Celebrity Solstice, which was delivered in October 2008.

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Our debt agreements contain covenants that require us, among other things, to maintain minimum net worth and fixed charge coverage ratio and limit our Net Debt-to-Capital ratio. We are in compliance with all covenants as of September 30, 2008.

Long-Term Debt

The fair values of our senior notes and senior debentures were estimated by obtaining quoted market prices. The fair values of all other debt were estimated using the present value of expected future cash flows.

The fair values of our senior notes and senior debentures were estimated
by obtaining quoted market prices. The fair values of all other debt were estimated
using the present value of expected future cash flows.

Note 4. Long-Term Debt

In January 2007, we issued €1.0 billion, or approximately $1.3 billion, of 5.625% senior unsecured notes due 2014 at a price of 99.638% of par. The net proceeds from the offering were used to retire the €701.0 million, or approximately $906.5 million, outstanding balance on our unsecured bridge loan facility obtained to finance our acquisition of Pullmantur. The remainder of the net proceeds, approximately €289.0 million, or approximately $374.8 million, was used to repay a portion of the outstanding balance on our unsecured revolving credit facility.

In February 2007, we entered into interest rate swap agreements that effectively change €1.0 billion of fixed rate debt with a weighted-average fixed rate of 5.625% to EURIBOR-based floating rate debt. We also entered into cross currency swap agreements that effectively changes €300.0 million of floating EURIBOR-based debt to $389.1 million floating LIBOR-based debt.

In March 2007, we entered into a $589.0 million unsecured term loan due through 2014 at a rate of 4.215%. The contractual interest rate under this loan agreement varies with our debt rating. In April 2007, we drew in full the $589.0 million available under this unsecured term loan. The proceeds were used towards the purchase of Liberty of the Seas, which was delivered in April 2007.

In June 2007, we amended and restated our unsecured revolving credit facility to increase the amount available from $1.0 billion to $1.2 billion, reduce the effective interest rate to LIBOR plus 0.485%, change the 0.175% commitment fee to a 0.140% facility fee and extend the maturity date from March 27, 2010 to June 29, 2012.

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Note 4. Long-Term Debt

In January 2007, we issued €1.0 billion, or approximately $1.3 billion, of 5.625% senior unsecured notes due 2014 at a price of 99.638% of par. The net proceeds from the offering were used to retire the €701.0 million, or approximately $906.5 million, outstanding balance on our unsecured bridge loan facility obtained to finance our acquisition of Pullmantur. The remainder of the net proceeds, approximately €289.0 million, or approximately $374.8 million, was used to repay a portion of the outstanding balance on our unsecured revolving credit facility.

In February 2007, we entered into interest rate swap agreements that effectively change €1.0 billion of fixed rate debt with a weighted-average fixed rate of 5.625% to EURIBOR-based floating rate debt. We also entered into cross currency swap agreements that effectively changes €300.0 million of floating EURIBOR-based debt to $389.1 million floating LIBOR-based debt.

In March 2007, we entered into a $589.0 million unsecured term loan due through 2014 at a rate of 4.215%. The contractual interest rate under this loan agreement varies with our debt rating. In April 2007, we drew in full the $589.0 million available under this unsecured term loan. The proceeds were used towards the purchase of Liberty of the Seas, which was delivered in April 2007.

In June 2007, we amended and restated our unsecured revolving credit facility to increase the amount available from $1.0 billion to $1.2 billion, reduce the effective interest rate to LIBOR plus 0.485%, change the 0.175% commitment fee to a 0.140% facility fee and extend the maturity date from March 27, 2010 to June 29, 2012.

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Note 5. Long-Term Debt

In January 2007, we issued €1.0 billion, or approximately $1.3 billion, of 5.625% senior unsecured notes due 2014 at a price of 99.638% of par. The net proceeds from the offering were used to retire the €701.0 million, or approximately $906.5 million, outstanding balance on our unsecured bridge loan facility obtained to finance our acquisition of Pullmantur. The remainder of the net proceeds, approximately €289.0 million, or approximately $374.8 million, was used to repay a portion of the outstanding balance on our unsecured revolving credit facility.

In February 2007, we entered into interest rate swap agreements that effectively change €1.0 billion of fixed rate debt with a weighted-average fixed rate of 5.625% to EURIBOR-based floating rate debt. We also entered into cross currency swap agreements that effectively changes €300.0 million of floating EURIBOR-based debt to $389.1 million floating LIBOR-based debt.

In March 2007, we entered into a $589.0 million unsecured term loan due through 2014 at a rate of 4.215%. The contractual interest rate under this loan agreement varies with our debt rating. In April 2007, we drew in full the $589.0 million available under this unsecured term loan. The proceeds were used towards the purchase of Liberty of the Seas, which was delivered in April 2007.

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Long-Term Debt

The fair values of our senior notes and senior debentures were estimated by obtaining quoted market prices. The fair values of all other debt were estimated using discounted cash flow analyses based on market rates available to us for similar debt with the same remaining maturities.

Note 5. Long-Term Debt

In April 2006, we entered into and drew in full a $570.0 million unsecured term loan due through 2013 at a rate of 3.77%. The contractual interest rate under this loan agreement varies with our debt rating.

In June 2006, we issued $550.0 million of 7% senior unsecured notes due 2013, at a price of 99.509% of par and $350.0 million of 7.25% senior unsecured notes due 2016, at a price of 99.690% of par.

In June 2006, we paid $530.6 million to redeem in full the accreted balance of our outstanding Liquid Yield Option™ Notes (“LYONs”) due February 2, 2021.

During the nine months ended September 30, 2006, holders of our LYONs converted approximately $13.5 million of the accreted value of these notes into approximately 319,000 shares of common stock and cash for fractional shares.

In September 2006, we called for redemption all of our outstanding zero coupon convertible notes due May 18, 2021. The redemption period ended in October 2006 at a redemption price of $503.85 per note. Most holders of the notes elected to convert them into shares of our common stock, rather than redeem them for cash, resulting in the issuance of approximately 2.9 million shares through September 30, 2006 and approximately 1.2 million shares through the end of the redemption period for a total of approximately 4.1 million shares. In addition to the 4.1 million shares issued related to the redemption, for the nine months ended September 30, 2006, holders of our zero coupon convertible notes converted approximately $11.5 million of the accreted balance of these notes into approximately 369,000 shares of common stock and cash for fractional shares.

During the nine months ended September 30, 2006, we prepaid a total of $153.8 million on a term loan secured by a certain Celebrity ship. We borrowed $150.0 million on our unsecured revolving credit facility to prepay the term loan.

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Note 5. Long-Term Debt

In April 2006, we entered into and drew in full a $570.0 million unsecured term loan due through 2013 at a rate of 3.77%. The contractual interest rate under this loan agreement varies with our debt rating.

In June 2006, we issued $550.0 million of 7% senior unsecured notes due 2013, at a price of 99.509% of par and $350.0 million of 7.25% senior unsecured notes due 2016, at a price of 99.690% of par.

In June 2006, we paid $530.6 million to redeem in full the accreted balance of our outstanding Liquid Yield Option™ Notes (“LYONs”) due February 2, 2021.

During the six months ended June 30, 2006, holders of our zero coupon convertible notes and LYONs converted approximately $11.5 million and $13.5 million of the accreted value of these notes, respectively, into approximately 688,000 shares of common stock and cash for fractional shares.

Long-Term Debt

The fair values of our senior notes, senior debentures, Liquid Yield Option™ Notes and zero coupon convertible notes were estimated by obtaining quoted market prices. The fair values of all other debt were estimated using discounted cash flow analyses based on market rates available to us for similar debt with the same remaining maturities.

Note 5. Long-Term Debt

In May 2005, we amended our $1.0 billion unsecured revolving credit facility to extend its maturity date to March 27, 2010, and reduce the currently effective interest rate to LIBOR plus 1.0% and the commitment fee to 0.2% of the undrawn portion of the facility. The other terms of the facility were unchanged. In addition, in May 2005, we entered into a five-year, $100.0 million unsecured term loan facility, at a currently effective interest rate of LIBOR plus 0.8% which can be drawn at any time prior to December 31, 2005. We have not drawn on this facility as of September 30, 2005.

In July 2005, we entered into an additional five-year, $100.0 million unsecured term loan facility, at a currently effective interest rate of LIBOR plus 0.8% and we drew the full amount of this facility in September 2005.

In August 2005, we paid $335.8 million in connection with the exercise of purchase options on our capital lease obligations for Legend of the Seas and Splendour of the Seas.

During the nine months ended September 30, 2005, holders of our zero coupon convertible notes converted approximately $254.6 million of the accreted value of these notes into approximately 8.4 million shares of our common stock and cash for fractional shares. In August 2005, we redeemed $182.3 million of the accreted balance of outstanding LYONs due February 2, 2021. Most holders of the LYONs elected to convert into shares of our common stock, rather than redeem for cash, resulting in the issuance of approximately 4.5 million shares.

Note 4. Long-Term Debt

In May 2005, we amended our $1.0 billion unsecured revolving credit facility to extend its maturity date to March 27, 2010, and to reduce the currently effective interest rate to LIBOR plus 1.0% and the commitment fee to 0.2% of the undrawn portion of the facility. The other terms of the facility were unchanged. In addition in May, we entered into a five-year, $100.0 million unsecured term loan facility, at a currently effective interest rate of LIBOR plus 0.8% which can be drawn at any time prior to December 31, 2005. We have not drawn on this facility as of June 30, 2005. During the six months ended June 30, 2005, holders of our zero coupon convertible notes converted approximately $108.4 million of the accreted value of these notes into approximately 3.6 million shares of our common stock and cash for fractional shares.