The Seatrade Cruise Med summit in Las Palmas places Gran Canaria’s port complex at the center of the global corporate debate. Far from a purely tourism-focused perspective, negotiations between cruise lines, private equity funds and port authorities are centered on strict financial metrics, addressing the restructuring of liabilities accumulated after the pandemic, margin compression caused by inflation at shipyards and regulatory cost arbitrage along the Atlantic corridor. This is one of the sector’s major challenges to be discussed in Las Palmas: the lower berth on a large newbuild costs more than €340,000 per berth, compared with €220,000 a decade ago.
Liabilities and WACC
During the 2025/2026 financial year, the main focus on the balance sheets of Carnival Corp, Royal Caribbean Group (RCL) and Norwegian Cruise Line Holdings (NCLH) has been accelerated deleveraging. The strategy seeks to reduce a weighted average cost of capital (WACC) that reached peaks of 8.4% following the issuance of secured debt during periods of operational uncertainty. Refinancing these obligations by transitioning from high coupons of close to 11.50% to new issues around 5.125% has generated net annual interest savings of more than €140 million for operators such as RCL.
In this process, Royal Caribbean Group is leading the sector’s restructuring after regaining investment-grade ratings from agencies including Fitch and S&P. During 2025, the company carried out the early repayment of €1.25 billion in bonds with double-digit coupons, replacing them with unsecured debt maturing in 2033. The move sharply reduced its financial burden and cut its net debt-to-adjusted EBITDA ratio to 2.6 times at the end of that year.
For its part, Carnival Corp, which operates a key terminal in Santa Cruz de Tenerife, allocated its entire record €3.4 billion in free cash flow to repurchasing senior debt trading at a discount. With gross leverage reduced by €4.1 billion over the past 18 months, the cruise line has narrowed the spread on its five-year credit default swaps (CDS) to 185 basis points, reinforcing confidence in the secondary debt markets.
The CAPEX and Orderbook Trap at Shipyards
At the same time, the newbuild market is suffering from a severe lack of capacity at the European facilities of Fincantieri, Meyer Werft and Chantiers de l’Atlantique, with dry docks virtually committed through 2030. This supply shortage has driven up asset valuations and altered the sector’s operating cost structure.
At present, the cost per lower berth on newbuilds exceeds €340,000, a 54% increase from the €220,000 recorded in 2015. This increase in upfront capital expenditure is forcing cruise lines to generate net daily yields per cabin of more than €285.00 to cover depreciation and the servicing of export credit agency (ECA) facilities.
Faced with these high barriers to entry for new fleets, major groups have suspended sales of ships for scrapping. Vessels built between 2000 and 2008, having paid off their original debt, are achieving adjusted EBITDA margins on assets of 41% on mid-Atlantic routes, operating at higher profitability because they do not carry the capital cost structure associated with new LNG-powered ships.
Seatrade Cruise Med 2026: The secondary debt market and newbuilding arbitrage with a major impact on the Canary Islands was first published on canarymaritime.com.
