NCL Secures $675M loan for Liquidity

[LMaxwell]

https://www.seatrade-cruise.com/news/nclh-secures-additional-675m-liquidity-amid-coronavirus-uncertainty

 

This is a second loan to bolster access to cash in short term 

Edited March 9, 2020 by LMaxwell

[CarolinaMamma]

Wow. One more thing to tip the scales in favor of using CFAR insurance instead of taking the FCC I’d I cancel our upcoming cruise. 
 

I feel badly for the cruise lines. This is beyond their control and it’s gotta hurt. 

[MeHeartCruising]

Deleted.

Edited March 9, 2020 by MeHeartCruising

[IrieBajan54]

That throws water on the false equivalence that some peddle that COVID-19 is not as bad as regular flu.

 

How many times has a cruise line had to secure a loan because regular flu had impacted revenue?

How many times have cruise ships been quarantined or refused docking because of regular flu?

Edited March 9, 2020 by IrieBajan54
correction

[pghflyer]

I think this was the intended link:

 

https://www.seatrade-cruise.com/news/nclh-secures-additional-675m-liquidity-amid-coronavirus-uncertainty

Edited March 9, 2020 by pghflyer

[LMaxwell]

3 minutes ago, MeHeartCruising said:

 

the posted link seems to be for a Carnival IT project instead of anything to do with NCL's finances.

 

Thank you for pointing that out; I had that article open as well.  I have fixed the first link.  

 

https://www.seatrade-cruise.com/news/nclh-secures-additional-675m-liquidity-amid-coronavirus-uncertainty

[MeHeartCruising]

Ouch.  They have used the Epic as collateral.  I guess that means she is their least favorite child.  Haha.

[luv2kroooz]

15 minutes ago, MeHeartCruising said:

Ouch.  They have used the Epic as collateral.  I guess that means she is their least favorite child.  Haha.

Poor Epic. Even NCL is quick to throw her under the bus.

 

Seriously that is pretty wild, not something you hear about routinely.

[Trimone]

Why do they need a loan, they have all the DSC ?

[ColeThornton]

5 minutes ago, Trimone said:

Why do they need a loan, they have all the DSC ?

 

 

Well, that obviously is because of the cheap people who remove it.   😉

[Comi.uy]

I hope this doesnt hurt us, the customers, in the long run ...

[Isabella Benjamin]

Norwegian took out that loan because they know exactly what's happening going on in other countries like Italy and they may have to close up shop for months. 

[Bonobochick]

 

[Russiamomm]

I look at this as a positive thing.  I’m a banker.  No bank is going to lend this kind of money if they’re not reasonably sure they will get the money back.  Trust me, no bank wants to have to own the Epic or any other cruise ship.  They want to be repaid in cash.  If they weren’t convinced they would be, they would not have made the loan.  This loan is a good thing.

[SplashOfWater]

9 minutes ago, Bonobochick said:

 

I can't believe (ok, I really can) that they actually think banning travel on cruise ships will stop the spread of coronavirus. Hello! It's spread by people, regardless of whether or not they are on a cruise ship.

[Isabella Benjamin]

2 minutes ago, akmarshall said:

I can't believe (ok, I really can) that they actually think banning travel on cruise ships will stop the spread of coronavirus. Hello! It's spread by people, regardless of whether or not they are on a cruise ship.

If it spreads too fast the hospitals will be beyond capacity.  

[Russiamomm]

5 minutes ago, akmarshall said:

I can't believe (ok, I really can) that they actually think banning travel on cruise ships will stop the spread of coronavirus. Hello! It's spread by people, regardless of whether or not they are on a cruise ship.

The madness has to stop.  Nothing will stop the spread of this thing.  We will have to learn to live with it. The entire world economy is at stake here.  Unfortunately, the Cruise lines are a convenient scapegoat.  But such is the world we live in.  Sigh.

[LMaxwell]

17 minutes ago, akmarshall said:

I can't believe (ok, I really can) that they actually think banning travel on cruise ships will stop the spread of coronavirus. Hello! It's spread by people, regardless of whether or not they are on a cruise ship.

 

What they can't keep doing is having ships with 3000+ people that need quarantine turning up at US ports with no real plan how to handle.  Pause on the industry is like a big reset and removes one part of containment puzzle.  Not saying it WILL happen, but don't be surprised.  

[LMaxwell]

31 minutes ago, Russiamomm said:

I look at this as a positive thing.  I’m a banker.  No bank is going to lend this kind of money if they’re not reasonably sure they will get the money back.  Trust me, no bank wants to have to own the Epic or any other cruise ship.  They want to be repaid in cash.  If they weren’t convinced they would be, they would not have made the loan.  This loan is a good thing.

 

NCL quickly saw cash flow problems and has made the unprecedented move of amending their deposit and refund policies for already booked guests to lock their money in.  Those two together aren't confidence inspiring.  NCL needs the cash to get through fixed cost operations and overhead.  But for how long?? That's a huge unknown. 

[ColeThornton]

Interesting.  RCL just did the same type of financial move to the tune of $550M.  No big surprise there.

[luv2kroooz]

Oh, the ban is coming, in my opinion. Just a matter of when and for how long. Perhaps another reason to not play your full hand of cards and cancel today.

[Farts]

1 hour ago, ColeThornton said:

Interesting.  RCL just did the same type of financial move to the tune of $550M.  No big surprise there.

What ship did they put up for collateral?

[CruisingSince1982]

58 minutes ago, blcruising said:

Oh, the ban is coming, in my opinion. Just a matter of when and for how long. Perhaps another reason to not play your full hand of cards and cancel today.

 

It is definitely coming. I wouldn't cancel until the last minute. If they stop you from going, they have to refund your money. I don't want a FCC - want the money back.

[Lupush]

There isn't a successful company in existence that doesn't leverage their holdings and borrow against their assets.  This was in the works before Coronavirus took over the news.  It would be cause for concern if banks REFUSED to lend to NCL.

[MeHeartCruising]

1 hour ago, Farts said:

What ship did they put up for collateral?

 

It was not mentioned in their press release announcing the financing. 

 

"MIAMI, March 10, 2020 /PRNewswire/ -- Royal Caribbean Cruises Ltd (NYSE: RCL) today announced that due to the spread and recent developments related to the COVID-19 outbreak, the company has increased its revolving credit capacity by $550 million bolstering the company's liquidity.  The company is pursuing additional actions to improve its liquidity by reducing capital expenditures, operating expenses and taking other actions to improve liquidity by at least a further $1.7 billion in 2020.  The company is also planning reductions to the 2021 capital expenditures and operating expenses.

 

The company had previously communicated that its 2020 guidance did not include the impact of the COVID-19 outbreak.  Given the recent government actions and the heightened impact and uncertainty of changes in the magnitude, duration and geographic reach of COVID-19, the company is withdrawing its first quarter and full-year 2020 guidance."