Norwegian to add debt capacity, revise credit facilities this quarter

By Devika Patel

Knoxville, Tenn., Oct. 7 – Norwegian Cruise Line Holdings Ltd. plans to enter the debt markets this quarter to amend and extend its operating facilities, revolver and term loan A, which become current in January 2023.

The company was careful about issuing debt during the Covid-19 pandemic and, as a result, has a manageable debt maturity schedule.

Norwegian also intends to increase its available debt capacity for added flexibility.

“During the pandemic, we were pretty methodical,” executive vice president and chief financial officer Mark A. Kempa said on the company’s investor event on Thursday.

“We were pretty deliberate in terms of when we were raising debt, how we were raising debt.

“We were very cognizant of the debt maturity towers of how that was going to come to play in the future.

“If you look at 2023, 2024 and 2025, we have plus or minus about $1 billion, $1.5 billion of maturities, which is a pretty clean debt tower allowing us to rebuild as we come out of the recovery,” he said.

The company intends to extend and amend its credit facilities.

“We are going to be in the marketplace later this year,” Kempa said.

“Our operating facilities, our revolver and term loan A will become current in January 2023.

“They mature in January 2024 but, from a balance sheet perspective, they become current in January 2023, so we are in discussions.

“We will see us in the marketplace this quarter to amend and extend those facilities and, based on everything we’ve seen with all of our relationships and the banks and all of our partners, we don’t anticipate that there’s going to be any material change to those terms because it’s going to be a short extension, amend and extend,” he said.

Norwegian is also in discussions to increase its available debt capacity in case another global event impacts the industry.

“In a rising rate environment, again, we are well-positioned from an interest and debt standpoint, given our overall cost of debt,” Kempa said.

“As of today, we currently have about $500 million of available debt capacity should we need and that is in addition to the $1 billion backstop that we have in place today and we are discussing with our lenders about increasing our available debt basket capacity.

“Not that we have intention to use any of it, but we want to have the flexibility, should there be some worldwide significant event that impacts the industry.

“We always want to have the flexibility,” he said.

Norwegian Cruise Lines is a Miami-based cruise company.

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