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Morgan Stanley has asked other banks to take portions of a $3 billion loan financing Royal Caribbean Cruises’ planned acquisition of a 50% stake in Sandals Resorts International, Bloomberg reported Wednesday, October 7, citing people familiar with the matter. Morgan Stanley initially provided the financing, according to the report, which was carried by Investing.com.
The proposed transfer would distribute part of the lending exposure among other banks. The loan has a 364-day term and carries interest at 1.125 percentage points above the Secured Overnight Financing Rate, or SOFR. Royal Caribbean has said the transaction is expected to close in early 2027, subject to customary approvals and closing conditions.
A short-term facility for the resort acquisition
Royal Caribbean announced the Sandals transaction in September. Its investor presentation describes an approximately $3 billion investment for a 50% equity interest, based on a $6 billion enterprise value. The company’s materials say it secured committed debt financing from Morgan Stanley, but do not identify the 364-day facility’s detailed terms.
The loan reported Wednesday is a bridge-style financing: a short-term facility intended to provide funds before longer-term borrowing is arranged. Investing.com reported that the loan is expected to be replaced later by longer-term debt, potentially including bonds. The story did not specify when that refinancing might occur or what proportion Morgan Stanley is seeking to place with other banks.
The reported margin of 1.125 percentage points is an addition to SOFR, a benchmark interest rate, rather than a fixed all-in borrowing cost. Because the benchmark can change, the eventual interest expense would depend on the applicable SOFR level while the loan remains outstanding; the article provided no estimate of the total rate or financing cost.
Deal pairs cruise operator with Caribbean hotel brands
Sandals Resorts International operates the Sandals and Beaches all-inclusive resort brands. Royal Caribbean’s presentation describes the business as having 18 resorts, with three more in development, across Caribbean destinations. It says Sandals was founded in Jamaica in 1981 and presents the proposed investment as a partnership intended to support future growth.
Royal Caribbean’s presentation says existing resort reservations, loyalty programs and operations are expected to continue as usual. It also says the joint venture is expected to be accounted for as an unconsolidated equity-method investment, meaning Royal Caribbean expects to recognize its share of the venture’s results rather than consolidate the resort business into its own operating accounts.
The company has said the purchase is expected to be accretive to earnings in the year after the announcement. It also stated that it expects to maintain net leverage within its target range and does not anticipate a change to its credit rating or capital-allocation approach. These are company expectations, not reported outcomes; the deal remains subject to completion conditions.
What is known about Morgan Stanley’s syndication
The Bloomberg report, as summarized by Investing.com, says Morgan Stanley asked other banks to purchase portions of the loan. It does not name the prospective lenders, say how much of the facility might be distributed, or report that any sale has been completed. Nor does it describe the loan’s collateral, covenants or any fees associated with the financing.
Sharing a loan among lenders can spread the amount of credit exposure held by the original provider. In this case, the reported request comes while the bank is also involved in financing other proposed corporate acquisitions, although the available report gives no indication that the Royal Caribbean facility is being transferred because of a specific concern about the borrower or transaction.
Closing expected in early 2027
Royal Caribbean’s September presentation gives early 2027 as the expected closing period, contingent on customary approvals and other closing conditions. The publicly available company materials cited here do not provide a more precise date or describe a change to that timetable. The 364-day tenor reported for the financing therefore indicates the stated duration of the loan, but does not by itself establish a scheduled refinancing date.
The next milestones are the completion of the acquisition process and any later replacement of the short-term facility with longer-term debt. Whether additional banks join the loan, the eventual mix of financing instruments and the final borrowing cost have not been disclosed in the reported information.
