NCL Corp. completes $1.6B, 2-part notes offering; terms

NCL Corp. Ltd. has completed a two-part bond offering, placing $1 billion of 5.875% five-year senior secured notes and $600 million of 7.75% seven-year senior unsecured notes at the tight end of talk, according to market sources.

Joint global coordinators and joint bookrunners were J.P. Morgan, Goldman Sachs, Mizuho, Barclays, Crédit Agricole, BNP Paribas, Truist, Fifth Third, R. Seelaus and Citi. Joint bookrunners were Citizens, Commerzbank, DNB, HSBC, Société Générale and Skandinaviska Enskilda Banken AB.

Concurrently, NCL today also proposed to sell its exchangeable senior notes due 2027 in a private offering. Proceeds of the transactions will be used to redeem all of the company's 12.25% secured notes due 2024 and 10.25% secured notes due 2026, and to make principal payments on debt maturing in the short term. The bond maturities targeted in the refinancing effort were printed during the early months of the pandemic.

Miami-based NCL, a Norwegian Cruise Line Holdings subsidiary, is a cruise line operator. The new secured notes will be secured by first-priority interests in, among other things and subject to certain agreed security principles, three of NCL's vessels, and guaranteed by its subsidiaries that own the property.

S&P Global Ratings today said it believes "substantial uncertainty remains around the company's ultimate recovery path and ability to ramp up its EBITDA and cash flow to more sustainable levels," citing the recent surge in coronavirus cases and result travel restrictions and safety measures. However, the agency expects the company's EBITDA will likely turn positive in the second half of 2022.

In preliminary results for the year ended Dec. 31, 2021, the company notes adjusted EBITDA at a loss of $1.6 billion to $1.8 billion for the reporting period, versus a $1 billion loss one year prior. Liquidity is expected to be approximately $2.7 billion as of year-end 2021, down from $3.3 billion at Dec. 31, 2020. Expected revenue was noted at $600 million to $650 million, versus $1.3 billion for the comparable 2020 period.

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