Posted on 02/19/2022 9:11:40 AM PST by entropy12
Norwegian Cruise Line Holdings Ltd. sold $1.6 billion of notes Thursday to refinance the expensive debt it took out in 2020 to weather the global lockdowns amid the pandemic.
The company tapped the U.S. junk-bond market to sell $1 billion of secured notes due in 2027 and $600 million of unsecured notes due in 2029, according to a statement. It is also offering $435 million of exchangeable notes due in 2027 in a private offering.
The secured notes priced with a yield of 5.875%, and the unsecured portion at 7.75%, according to a person familiar with the matter who ...
Intends to use proceeds to redeem 12.25% and 10.25% notes The company is using three cruise vessels as guarantees
(Excerpt) Read more at news.bloomberglaw.com ...
Ping..
This may not end well
It will not end well for any of the cruise lines.
They are up to their ears in debt building liners for a market that no longer exists in the short term. It may come back, but by the time it does these boats will be in need of major refit.
I would say Norwegian is already dead and anyone who take an unsecured note is out of their mind.
Didn’t most high yield debt instrument perform in the 80’s in spite of the government forcing some institutions to dump their junk bonds portfolios?
During my 5 cruises since the pandemic began, I saw so many ships just parked in the sea without any human activity. Like ghost ships. It was a depressing sight.
Carnival just sold 2 more of their ships
Russia has illegally invaded another country, occupied their territory, wants to occupy more of their territory, and is currently threatening nuclear war with anyone who opposes them.
Russia is a problem.
Junk as in unsecured is not necessarily a bad bet, and can perform quite well.
The cruise business is dead in the short term. The operators are holding a lot of debt for the vessels that they can’t sail.
Every time they want to get back to business, there is some new variant of the Fauci Flu, that stops them from resuming normal operations. Almost seems to be a concerted effort to bankrupt them out of business.
That’s my view from the cheap seats...somebody doesn’t want them back in business, and anyone who would take unsecured debt from a business with a target on it is not a good play in the short term.
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