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Navigating financial risk management in Royal Caribbean Group: a study of interest rate risk
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Orientador(es)
Resumo(s)
This work investigates the financial risk management (FRM) practises of Royal Caribbean Group
(RCG), focusing on its management of interest rate risk. Using a combination of financial impact
modelling and market valuation analysis, the study evaluates RCG's current hedging strategies,
including interest rate swaps, and their effectiveness in mitigating volatility, ensuring cash flow
stability, and enhancing market confidence. Findings reveal that while RCG's existing strategies
effectively reduce the downside risk (swaps lower volatility of interest expenses by 11.2%, for the
12 years), they limit potential gains when there are favourable market conditions.
Recommendations include indexing new loans and their corresponding swap agreements to
EURIBOR instead of SOFR for improved alignment with macroeconomic trends.
Descrição
Palavras-chave
Financial risk management Market risk Hedging strategies Corporate finance Financial instruments Interest rate risk