A dry-docked Royal Caribbean Cruises (NYSE:RCL) is heading back to the debt markets to raise cash and boost its liquidity during the COVID-19 pandemic.

The cruise ship operator is raising an additional $2 billion in bonds and convertible notes less than one month after it sold over $3 billion in senior secured notes at high interest rates. It was forced to use a tricky maneuver to avoid violating covenants that limited the amount of debt it could take on. To attract investors, it gave them priority interest in entities that owned 28 of its cruise ships, putting them second in line to collect if Royal Caribbean ran aground.

A cruise ship in open water.

Image source: Getty Images.

Now it's dipping into the debt well again and the new vehicle seems similar to the last, guaranteeing to investors on a senior unsecured basis a subsidiary Royal Caribbean is creating that will own all of the equity interests in seven of its cruise ships, valued at about $7.7 billion.

It plans to use the proceeds for general corporate purposes.

A rogue wave

Many are hopeful the reopening economy will soon return the cruise industry to normal, though it seems cruise ship operators still face stormy seas. Carnival's (NYSE:CCL) Princess Cruises, for example, just announced it was extending the "pause" in voyages out until October in some cases because various global ports have yet to reopen. It is trying to entice guests not to cancel their reservations by offering credits that can double the value of the fare they paid.

Royal Caribbean's bonds have already been dropped to junk status by the ratings agencies, which is why there are limits imposed on how much debt it can issue. Piling the debt higher through creative means may not help.