I wasn't implying they would plonk down a suitcase of cash. You can still sub contract out all that stuff and still pay cash...not actual physical cash.Any capital investment like a cruise ship isn't paid for by plonking down a suit case full of cash, there's so many entities that are involved in any kind of production of something like a cruise ship, marine architects, designers, ship yard construction, the myriad of suppliers of everything from furniture to wallpaper, to light fixtures, bathroom etc.. it's endless and each one has their own contract with the company building the ship, once the construction is finished and the ship passes it's sea trials then and only then does DCL take delivery, so the financing is a massive undertaking not just a single sticker like a new car.
Maybe he put it on the Disney Visa card to get the 1% Disney money?
You finance it because it increases your return on capital and lowers your capital risk on the investment. It's better from a business perspective to do the financing than to pay cash, even if you have the cash on hand, assuming you can get decent financing terms. Plus, the Disney Cruise Line subsidiary probably doesn't have that kind of cash on hand.I'm surprised they need to finance it.
Wouldn's Disney pay the annual service charge to got the premier card so that they could get 2% back?Maybe he put it on the Disney Visa card to get the 1% Disney money?
Large conglomerates don't have billions in cash reserves. They could issue more shares but that would dilute their stock and have even more costly ramifications. Getting an interest rate under 4% is a way better financial decision.
The Meyer Werft shipbuilders don't fall into any of the 2% categories.Wouldn's Disney pay the annual service charge to got the premier card so that they could get 2% back?
would that be the case for the Dream and Fantasy? Or is they still on the payment schedule? Or did they pay it in advance to secure the new loan? 12 years that's amazing!....from the 2017 annual report:
"In October 2016, the Company entered into two credit facilities to finance two new cruise ships, which are expected to be delivered in 2021 and 2023. The financing may be used for up to 80% of the contract price of the cruise ships. Under the agreements, $1.0 billion in financing is available beginning in April 2021 and $1.1 billion is available beginning in April 2023. If utilized, the interest rates will be fixed at 3.48% and 3.74%, respectively, and payable semi-annually. The loans will be repaid in 24 equal installments over a 12-year period from the borrowing date. Early repayment is permitted subject to cancellation fees."
I'll speculate a little based on the annual report excerpt and my knowledge of financings from a different field (where I'm not a finance guy but am involved in such transactions).So then the Magic and Wonder are PIF and they use cash on hand to replace/refurbished/update as needed?
So if...
would that be the case for the Dream and Fantasy? Or is they still on the payment schedule? Or did they pay it in advance to secure the new loan? 12 years that's amazing!