Royal Caribbean Cruises Ltd. arranged financing for 80% of the contract price of the Oasis of the Seas, or $1.05 billion, the amount due in November upon delivery of the world’s largest cruise ship.

Finnvera, an export credit agency owned by Finland, guaranteed 95% of the financing, which was secured from European banks BNP Paribas, Nordea and SEB.

Each bank committed to 20% of the financing, with the option to opt out after six years. Finnish Export Credit Ltd., a subsidiary of Finnvera, will finance the remaining 40%, RCCL said.

"With the tight credit environment and lack of liquidity in the financial markets today, this financing is a testimony to the strength of our company, the terrific partnership we have with Finland and the outstanding long-term relationships we enjoy with our banks," stated Brian Rice, RCCL’s executive vice president and CFO.

While RCCL was expected to secure financing for the ship, tight credit markets made the loan more difficult to obtain and guarantee.

"This 95% guarantee is higher than the 80% guarantees historically provided by Finnvera and potentially indicative of difficulty finding financing without this government backstop," said Robin Farley, equity analyst with UBS. "This is the first time we can recall a government agency not just guaranteeing a portion of the outstanding debt, but also providing actual financing."

Farley noted that RCCL still needs to obtain similar financing for the next Oasis-class ship, which is under construction and set to debut in December 2010.


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