NCL Corporation Ltd. and NCL Finance, Ltd. Announce Proposed Offerings of Senior Notes

Rhea-AI Summary

NCL Corporation Ltd., a subsidiary of Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), is proposing to sell $550 million in 5.875% Senior Notes due 2026 and $550 million in senior notes due 2028 in a private offering. These offerings are part of an effort to repay existing secured credit facilities and support general corporate purposes. The notes will not be registered under the Securities Act, reflecting the company's strategy to enhance financial flexibility amidst ongoing pandemic-related challenges.

Positive

• Proceeds from the offerings will be used to repay existing debt, improving the company's financial position.
• The issuance aligns with NCL's strategy to manage liquidity during uncertain market conditions.

Negative

• Significant reliance on debt financing poses risks to financial stability.
• Potential dilution of existing shareholders due to future financing needs.

MIAMI, March 01, 2021 (GLOBE NEWSWIRE) -- NCL Corporation Ltd. (“NCLC”), a subsidiary of Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), announced today that it is proposing to sell $550 million aggregate principal amount of its 5.875% Senior Notes due 2026 (the “NCLC Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The NCLC Notes will form part of the same series as the $850 million aggregate principal amount of 5.875% Senior Notes due 2026 issued on December 18, 2020 and will be guaranteed by certain of NCLC’s subsidiaries on a senior unsecured basis.

NCL Finance, Ltd. (“NCL Finance”), a subsidiary of NCLC, is also proposing to sell $550 million aggregate principal amount of its senior notes due 2028 (the “NCL Finance Notes” and, collectively with the NCLC Notes, the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act. The NCL Finance Notes will be guaranteed by NCLC and certain of NCLC’s subsidiaries on a senior unsecured basis.

NCLC and NCL Finance expect to use the net proceeds from the offerings to fully repay the aggregate principal amounts outstanding under two of NCLC’s senior secured credit facilities, together with accrued but unpaid interest thereon, and to pay any related transaction premiums, fees and expenses, with the remainder of the net proceeds from the offerings to be used for general corporate purposes.

The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

Cautionary Statement Concerning Forward-Looking Statements

Some of the statements, estimates or projections contained in this press release are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, valuation and appraisals of our assets and objectives of management for future operations (including those regarding expected fleet additions, our voluntary suspension, our ability to weather the impacts of the novel coronavirus (“COVID-19”) pandemic, our expectations regarding the resumption of cruise voyages and the timing for such resumption of cruise voyages, the implementation of and effectiveness of our health and safety protocols, operational position, demand for voyages, financing opportunities and extensions, and future cost mitigation and cash conservation efforts and efforts to reduce operating expenses and capital expenditures) are forward-looking statements. Many, but not all, of these statements can be found by looking for words like “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,” “may,” “forecast,” “estimate,” “intend,” “future” and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of:

• the spread of epidemics, pandemics and viral outbreaks and specifically, the COVID-19 pandemic, including its effect on the ability or desire of people to travel (including on cruises), which are expected to continue to adversely impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price;
• our ability to comply with the U.S. Centers for Disease Control and Prevention (“CDC”) Framework for Conditional Sailing Order and any additional or future regulatory restrictions on our operations and to otherwise develop enhanced health and safety protocols to adapt to the pandemic’s unique challenges once operations resume and to otherwise safely resume our operations when conditions allow;
• coordination and cooperation with the CDC, the federal government and global public health authorities to take precautions to protect the health, safety and security of guests, crew and the communities visited and the implementation of any such precautions;
• our ability to work with lenders and others or otherwise pursue options to defer, renegotiate or refinance our existing debt profile, near-term debt amortization, newbuild related payments and other obligations and to work with credit card processors to satisfy current or potential future demands for collateral on cash advanced from customers relating to future cruises;
• our future need for additional financing, which may not be available on favorable terms, or at all, and may be dilutive to existing shareholders;
• our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements;
• the accuracy of any appraisals of our assets as a result of the impact of COVID-19 or otherwise;
• our success in reducing operating expenses and capital expenditures and the impact of any such reductions;
• our guests’ election to take cash refunds in lieu of future cruise credits or the continuation of any trends relating to such election;
• trends in, or changes to, future bookings and our ability to take future reservations and receive deposits related thereto;
• the unavailability of ports of call;
• future increases in the price of, or major changes or reduction in, commercial airline services;
• adverse events impacting the security of travel, such as terrorist acts, armed conflict and threats thereof, acts of piracy, and other international events;
• adverse incidents involving cruise ships;
• adverse general economic and related factors, such as fluctuating or increasing levels of unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence;
• any further impairment of our trademarks, trade names or goodwill;
• breaches in data security or other disturbances to our information technology and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection;
• changes in fuel prices and the type of fuel we are permitted to use and/or other cruise operating costs;
• mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities;
• the risks and increased costs associated with operating internationally;
• fluctuations in foreign currency exchange rates;
• overcapacity in key markets or globally;
• our expansion into and investments in new markets;
• our inability to obtain adequate insurance coverage;
• pending or threatened litigation, investigations and enforcement actions;
• volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees;
• our inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues;
• our reliance on third parties to provide hotel management services for certain ships and certain other services;
• our inability to keep pace with developments in technology;
• changes involving the tax and environmental regulatory regimes in which we operate; and
• other factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021.

Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown.

The above examples are not exhaustive and new risks emerge from time to time. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future. These forward-looking statements speak only as of the date made.

We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based, except as required by law.

Investor Relations & Media Contact

Andrea DeMarco
(305) 468-2339
InvestorRelations@nclcorp.com

Jessica John
(786) 913-2902

FAQ

What is the purpose of NCLH's proposed $550 million senior notes offering?

The proposed $550 million offering aims to repay existing credit facilities and support general corporate purposes.

When are the NCL Corporation Ltd. senior notes due?

The NCL Corporation Ltd. senior notes have maturities due in 2026 and 2028.

What are the financial terms of NCLH's senior notes offering?

The senior notes will carry a 5.875% interest rate, reflecting the company's current borrowing costs.

How will the proceeds from NCLH's notes offering impact its financial situation?

The proceeds will improve liquidity by repaying existing debt, reducing financial strain.

Is the NCLH notes offering registered with the SEC?

No, the notes are offered in a private placement and will not be registered under the Securities Act.