Cash-strapped royal caribbean draws down its revolving credit lines as coronavirus pandemic tests the cruise industry

This is a file photo showing Royal Caribbean Cruises Ltd.'s Quantum-class cruise ship, the Anthem of the Sea, as it sits moored at the Cape Liberty Cruise Port in Bayonne, Oct. 6, 2015.

Michael Nagle | Bloomberg | Getty Images Royal Caribbean has fully drawn down two of its revolving credit lines as the struggling cruise industry scrambles to stay in business while the

coronavirus pandemic leaves ships empty and moored at docks across the world, the company said in a new securities filing. The company tapped $3.48 billion in backup financing between two

revolving lines held by Nordea Bank and Scotiabank, Royal Caribbean said Thursday in a filing. The drawdown is another example of how Royal, along with peers Carnival Corp. and Norwegian

Cruise, have sought cash infusions to remain solvent after the industry announced a suspension of operations due to the coronavirus pandemic. Shares of Royal Caribbean rose by more than 4%

in morning trading before finishing the day down more than 3%. The stock has fallen about 80% since Jan. 1. Royal Caribbean had previously announced steps to bolster its finances. On March

23, the company said it entered into a $2.2 billion loan agreement with a consortium of lenders. At the time, the company said it had $3.6 billion of liquidity, including undrawn revolving

credit lines. The company had roughly $11 billion in total debt as of Dec. 31 that included $165 million drawn on its revolving credit lines, it disclosed in its end-of-year financial

results.  "This is a period of unprecedented disruption for the cruise industry," Royal CFO Jason T. Liberty said in a statement on March 23. "We continue to take decisive

actions to protect the company's financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans." On Wednesday, Royal announced

that its CEO Richard Fain will forego his base salary through September 30, 2020. Other executives will take a 25% hit to their salaries through the same period, the company said. 

Royal's competitor Carnival Corp. on Tuesday announced it's issuing $1.25 billion in stock and raising $4.75 billion in fresh debt. However, on Wednesday, the company announced it

was reducing the size of its stock offering to just $500 million at $8 per share, which is lower than the price the company's shares closed at on Wednesday. Carnival also announced

Tuesday it is suspending the payment of dividends to shareholders, a move which Royal has not yet taken.  On March 13, the Cruise Lines International Association, of which Royal is a member,

announced a 30-day suspension of North American operations amid the COVID-19 pandemic. Last week, Royal said it expects operations to resume on May 12, and not until July 1 in parts of

North America.  It remains unclear if the major cruise companies will be left out of the bailout fund included in the $2 trillion stimulus package passed last week.