Long-term debt burden increases

Long-term debt burden increasesLong-term debts of the three listed major cruise groups increased by 13.1%, year on, to a total of $58.6 billion at the end of the third quarter.

CCL, whose third quarter ended on 31 August, registered the sharpest increase, of 21.2%, followed by RCG’s 10.7% increase, while NCLH saw a rise of just 1.5% on this occasion.

LONG-TERM DEBTS (in million USD)

Company 3Q21  3Q20
Carnival 26,831 22,130
Royal Caribbean Group 19,882 17,957
NCLH 11,864 11,681

Source: CCL, RCG, & NCLH

As the industry gradually resumes operations, companies like CCL are paying off expensive debts raised at high rates of interest at the start of the pandemic and refinancing them by new debts that can be raised at lower costs.

Such moves can be regarded as timely, given that the rising inflation – year-on-year consumer prices in the USA rose by 6.2% in October, a rate last seen three decades ago – has raised the prospects of higher interest rates in the not-too-distant future.

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