Item 1.01 Entry into a Material Definitive
Agreement
On April 28, 2020, we amended the export-credit
backed loan facility incurred to finance Celebrity Edge and on April 29, 2020, we amended the export-credit backed loan
facility incurred to finance Celebrity Apex and Symphony of the Seas, in each case in order to incorporate the benefits
of a 12-month debt holiday initiative being offered by BpiFrance Assurance Export (“BpiFAE”), the official export credit
agency of France, to the cruise industry (the “Debt Holiday”). The general intention of this initiative is to provide
interim debt service and financial covenant relief during the current global health crisis to cruise-line borrowers with respect
to their export credit agency guaranteed financings.
Under the terms of each amendment, the
lenders have made available to us a new tranche of the loan (the “Bpi Deferred Tranche”), the proceeds of which will
be used to repay any principal amortization payments due on the facility between April 1, 2020 and March 31, 2021 (the “Bpi
Deferral Period”). The Bpi Deferred Tranche will be repayable in eight equal semi-annual installments between April 2021
and October 2024, in the case of Celebrity Edge and between September 2021 and March 2025, in the case of Celebrity Apex
and Symphony of the Seas. Interest on the Bpi Deferred Tranche will accrue at the same floating rate that applies to
the existing loan (LIBOR plus 0.90% per annum, in the case of Celebrity Edge and Celebrity Apex and LIBOR
plus 1.10% in the case of Symphony of the Seas). Interest is payable during the Bpi Deferral Period.
The lenders have also agreed that, during
the Bpi Deferral Period, a breach of the financial covenants will not trigger a mandatory prepayment under the facilities.
In the event we take certain actions while
the Bpi Deferred Tranche is outstanding, we will be required to prepay the outstanding balance of the Bpi Deferred Tranche. These
actions include the payment of dividends, the repurchase of stock, and the issuance of debt or equity other than for liquidity.
These restrictions are subject to customary carveouts such as, in the case of new debt, debt incurred to finance new ships.
Certain of the lenders participating in
the amended facility, and affiliates of those parties, provide banking, investment banking and other financial services to us from
time to time for which they have received, and will in the future receive, customary fees.
Across
the three facilities described above, the Debt Holiday amendments will generate approximately $220 million of incremental liquidity through
April 2021.
The foregoing description of the provisions
of the amendments is summary in nature and is qualified in its entirety by reference to the full and complete terms of the amendments,
copies of which are filed herewith as Exhibits 10.1, 10.2 and 10.3 and incorporated herein by reference.