Norwegian Cruise Line Holdings Ltd. Secures Over $2 Billion of Liquidity

Norwegian Cruise Line Holdings Ltd. (NCL) announced it successfully secured over $2 billion of additional liquidity in response to affects of the COVID-19 (coronavirus) pandemic on the company and the cruise industry, including the temporary suspension of  voyages, and to safeguard against a further downside scenario. 

On Tuesday, NCL submitted a securities filing to the United States Securities and Exchange Commission, warning it may have to seek bankruptcy protection. At the same time, the company announced the launch of a series of capital markets transactions, led by Goldman Sachs, to raise approximately $2 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 $400 million public offering of common equity, $750 million exchangeable senior notes offering, $675 million senior secured notes offering and $400 million private investment from global consumer-focused private equity firm L Catterton

Contingent on completion of the transactions, the NCL expects to have approximately $3.5 billion of liquidity. This significantly strengthens its 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. While this is not the company’s base case expectation, it has taken a swift and proactive approach to protect its future given the significant uncertainty and unknown duration of the COVID-19 global pandemic. 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.

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