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Strong demand for NCLH funding drive removes fears of collapse

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 06 May 2020 06 May 2020

Strong demand for the debt and equity securities of Norwegian Cruise Line Holdings Ltd (NCLH) has removed fears the company expressed yesterday that it might not be able to continue as a going concern.

“Contingent on completion of the transactions, the Company expects to have approximately $3.5 billion of liquidity. This significantly strengthens the Company’s financial position and liquidity runway and it now expects to be positioned to withstand well over 12 months of voyage suspensions in a potential downside scenario,’ NCLH said in a statement.

“When the transactions are completed, the additional liquidity alleviates management’s concern about the Company’s ability to continue as a going concern for the next 12 months,” the Miami based listed company said.

The company on 5 May announced the launch of a series of capital markets transactions, led by Goldman Sachs, to raise approximately $2.00 billion.

”The transaction has since been upsized to gross proceeds of $2.225 billion ($2.4 billion if the underwriters exercise their full overallotment options) due to significant oversubscription and demand across all three offerings. The transactions consisted of (1) $400 million public offering of common equity, (2) $750 million exchangeable senior notes offering, (3) $675 million senior secured notes offering and (4) $400 million private investment from global consumer-focused private equity firm L Catterton,” NCLH stated.

NCLH: “substantial doubt” about ability to continue as going concern

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 05 May 2020 05 May 2020

Norwegian Cruise Line Holdings Ltd. (NCLH), the world’s third largest cruise shipping group, has raised “substantial doubt” about its ability to continue as a growing concern as it does not have enough liquidity to meet its obligations over the next 12 months, it said in a statement.

This was published on the same day, 5 May, as the company unveiled a plan to raise a total of $2.00 billion i debt and equity.

The company said the aftermath of COVID-19 outbreak and, in particular, “the suspension of cruise voyages and decline in advanced bookings, as well as debt maturities and other obligations over the next year, and the fact that management’s plan to obtain additional financing has not yet been completed, have raised substantial doubt about the Company’s ability to continue as a going concern, as the Company does not have sufficient liquidity to meet its obligations over the next twelve months, assuming no additional financing or other proactive measures,” NCLH said.

“We anticipate needing additional financing, and such financing may not be available on favorable terms, or at all, and may be dilutive to existing shareholders”, we believe the net proceeds received in such financing along with our ability to defer certain debt payments will be sufficient to provide the necessary liquidity meet our obligations during the next 12 months, including the maintenance of minimum levels of liquidity required by certain of our debt agreements. There can be no assurance, however, that we will be able to complete such financing, raise sufficient additional capital or that other factors will improve enough to offset operating losses,” the company stated.

NCLH unveils $2.00 billion debt, equity offerings

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 05 May 2020 05 May 2020

Norwegian Cruise Line Holdings Ltd. (NCLH), the world’s third largest listed cruise shipping group, has unveiled debt and equity offerings totalling at $2.00 billion, of which $350 million is equity and the rest debt.

NCLH said it has commenced an underwritten public offering of $350 million of ordinary shares. “The Company intends to grant the underwriters an option to purchase up to $52.5 million of additional ordinary shares. The Company expects to use the net proceeds from the Offering for general corporate purposes,” NCLH said in a statement.

Meanwhile, NCL Corporation Ltd. (NCLC), a subsidiary of NCLH, announced today that it is proposing to sell $650 million aggregate principal amount of its exchangeable senior notes due 2024 in a private offering.

“NCLC intends to grant the initial purchasers of the Exchangeable Notes an option to purchase, during a 13-day period beginning on, and including, the first day on which the Exchangeable Notes are issued, up to an additional $97.5 million aggregate principal amount of Exchangeable Notes,” NLCH said.

“The Exchangeable Notes will be general senior unsecured obligations of NCLC, guaranteed by NCLH, and will be convertible at the holder’s option at any time prior to the close of business on the business day immediately preceding the maturity date into Series A Preference Shares of NCLC (“Preference Shares”), which shall be automatically exchangeable into a number of ordinary shares of NCLH,” the Miami based NCLH said.

In addition, NCLC is also proposing to sell $600 million aggregate principal amount of its senior secured notes due 2024 in a private offering.

“The Secured Notes and certain of the related guarantees will be secured by first-priority interests in, among other things and subject to certain agreed security principles, shares of capital stock in certain subsidiary guarantors, two of our vessels, our material intellectual property and two islands that we use in the operations of our cruise business,” NCLH stated..

Finally, NCLC announced a private placement of up to $400 million in aggregate principal amount of exchangeable senior notes due 2026 to an affiliate of L Catterton, the consumer focused private equity firm. "The Private Exchangeable Notes will accrue payment-in-kind interest at a rate of 7.0% per annum for the first year post-issuance, 4.5% per annum payment-in-kind interest plus 3.0% per annum cash interest for the following four years post issuance and 7.5% in cash for the final year prior to maturity," NCLH said.

Carnival Cruise Line plans to resume North American service with eight ships August 1

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 04 May 2020 04 May 2020

Carnival Cruise Line, the US and Australian focused contemporary market unit in Carnival Corporation & plc group, said it has advised guests and travel agents today of its plan to phase in a resumption in its North American service this summer, beginning on August 1 with a total of eight ships.

These will operate from Miami, Port Canaveral and Galveston.  “In connection with this plan, our pause in operations will be extended in all other North American and Australian markets through August 31.

The key elements of this plan include:

• All North American cruises from June 27 to July 31 will be cancelled
• Beginning August 1, we plan to resume cruises on the following ships:

o       Galveston:  Carnival Dream, Carnival Freedom and Carnival Vista

o       Miami:  Carnival Horizon, Carnival Magic and Carnival Sensation

o       Port Canaveral:  Carnival Breeze and Carnival Elation.

• Other than the above referenced service from Galveston, Miami, and Port Canaveral, all other North American and Australian homeport cruises will be cancelled through August 31.
• All Carnival Spirit Alaskan cruises from Seattle will be cancelled, as well as the Carnival Spirit Vancouver-Honolulu cruise on September 25 and the Honolulu-Brisbane transpacific cruise on October 6.
• All Carnival Splendor cruises in Australia from June 19 to August 31 will be cancelled.

Impacted guests and their travel advisors are being notified by email, including options for a combined future cruise credit (FCC) and onboard credit (OBC) package, or a full refund.  Booked guests can make their selection online, alleviating the need to contact Carnival's customer service center, which is still operating in a work-from-home status due to locally-imposed office closures in South Florida.\

“We are committed to supporting all public health efforts to manage the COVID-19 situation. We are taking a measured approach, focusing our return to service on a select number of homeports where we have more significant operations that are easily accessible by car for the majority of our guests,” the company said in a statement.

“We will use this additional time to continue to engage experts, government officials and stakeholders on additional protocols and procedures to protect the health and safety of our guests, crew and the communities we serve.  We appreciate the understanding and support of our guests and travel agent partners and look forward to welcoming them on board as the environment for travel and tourism improves,” Carnival Cruise Line said