What If NCL files for bankruptcy? And we have cruises book ?

[SouthLyonCruiser]

20 hours ago, Ptroxx said:

What’s everyone thoughts on this ?   
what do you think would happen if you have a paid in full cruise?? 
I have a May 2nd cruise and starting to worry a little bit with the market dumping as it is. NCL is now down to $7.xx A share.  
 

what’s everyone thoughts.  

I'm safe, my travel insurance covers bankruptcies.

[TrumpyNor]

4 minutes ago, SouthLyonCruiser said:

I'm safe, my travel insurance covers bankruptcies.

I have a very good travel insurance, but unfortunately it doesn't cover bankruptcies.... 😞 

[Formula280SS]

11 hours ago, npcl said:

I suspect that congress could quite easily ignore the impact on embarkation port areas.  IMO, the embarkation ports and related benefactors of hosting cruise lines, which are currently hurting, will be considered.  Florida is key for cruise lines, and a big political chip. 

 

While there might be some losses to ports. the embarkation  ports are located in tourist areas that might suffer some loss, usually the port itself (generally local government organizations) the surrounding tourist infrastructure would, in general survive. Even if all 3 were to fail totally.

 

It is unlikely all 3 would fail totally.  NCLH the smallest of the 3 would have the least impact.

 

If the government were to provide aid I suspect that it would either be as part of a restructuring that would wipe the shareholder and for that matter management, while protecting to some degree suppliers, employees, ports and surrounding jobs or some other form as lender of last resort.  Normally, if the failure was the result of the consequences of bad decisions by the Board of Directors, CEO and/or management, I would agree.  NONE APPLIES.  This is not a 'bail out of big banks whose lending behavior/practices where legendary failures culminating in 2008.  I would be more comfortable with, in exchange for cruise line improvements in screening, medical capbilities and evacuations, government aid be in the forum of investing in Preferred Stock as well as a Per Passenger US Fee for repayment of Government Loans and/or Lines of Credit for liquidity.

 

While the congressional delegations from the major port areas (Southern Florida, Washington, California) might support a bailout, there are a large number that are not strong supporters of the cruise lines with probably as many that are downright hostile as there are strong supporters. Some of the items currently being tossed about would render the cruise industry pretty unprofitable as it is run today, with the current fare structures.  Yep, those against the cruise industry want US wages, benefits, Department of Labor compliance, etc.; basically at least TRIPLING the current cost to cruise IMO.

 

Some of the discussions are already pointing at the money being spent in stock buy backs and similar corporate actions.  Where if that money had been kept, would have greatly reduced or eliminated the need for a bailout.  I am unaware of those but will take a look.

 

Thanks for the discussion.

[v4e]

Why is a NCLH ship (Regent) Seven Seas Splendor (A brand new ship) just paddling around the Pacific burning fuel with no passengers?  See https://www.marinetraffic.com/en/ais/home/shipid:5937254/zoom:9 .  Look at its past track history.

 

 

 

 

[Ptroxx]

39 minutes ago, SouthLyonCruiser said:

I'm safe, my travel insurance covers bankruptcies.

What insurance company did you use ?  

[Formula280SS]

11 hours ago, npcl said:

Both RCL and CCL use bond offerings to fund ships. as well as using unsecured loans guaranteed by  export credit agencies from the countries where the ships are built.  NCLH is less clear since they do not have any public bond offerings.  Since they were owned by a Chinese company and Apollo prior to selling to NCLH their loan sources are a bit less public.

 

NCLH is a Publicly Traded Corporation and is subject to all SEC filing requirements (Annual, Quarterly, certain events, etc.).

 

Here is a link to the NCLH 2019 SEC 10K Annual Report

 

http://www.nclhltdinvestor.com/static-files/ebce2e02-cf0d-42ce-b3f6-4c91efcd3c9a

 

Here is a screenshot of the NCLH Debt (SEC filings are not Copywrited).

 

 

Here is the Footnotes Disclosures of the above debt that follows:

 

 

On December 16, 2019, NCLC issued $565.0 million aggregate principle amount of 3.625% senior unsecured notes due December 2024 (the “Notes”) in a private offering (the “Offering”) at par. NCLC used the net proceeds from the Offering, after deducting the initial purchasers’ discount and estimated fees and expenses, together with cash on hand, to redeem $565.0 million principal amount of outstanding 4.75% Senior Notes due 2021 at a price equal to 100% of the principal amount being redeemed and paid the premium of $6.7 million. The redemption also resulted in a write-off of $2.7 million of deferred fees.

 

NCLC will pay interest on the Notes at 3.625% per annum, semiannually on June 15 and December 15 of each year, commencing on June 15, 2020, to holders of record at the close of business on the immediately preceding June 1 and December 1, respectively. NCLC may redeem the Notes, in whole or part, at any time prior to December 15, 2021, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but not including, the redemption date and a “make-whole premium.” NCLC may redeem the Notes, in whole or in part, on or after December 15, 2021, at the redemption prices set forth in the indenture governing the Notes. At any time (which may be more than once) on or prior to December 15, 2021, NCLC may choose to redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 103.625% of the face amount thereof with an amount equal to the net proceeds of one or more equity offerings, so long as at least 60% of the aggregate principal amount of the Notes issued remains outstanding following such redemption. The indenture governing the Notes contains covenants that limit NCLC’s ability to, among other things: (i) create liens on certain assets to secure debt; (ii) enter into sale leaseback transactions; and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets. The indenture governing the Notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium (if any), interest and other monetary obligations on all of the then-outstanding Notes to become due and payable immediately.

 

On October 30, 2019, we took delivery of Norwegian Encore. We had export financing in place for 80% of the contract price. The associated $882.9 million term loan bears interest at a fixed rate of 3.92% with a maturity date of October 30, 2031. Principal and interest payments are payable semiannually.

 

In October 2019, we entered into a $75 million revolving credit line agreement that matures in October 2020 and bears interest at LIBOR plus a margin of 0.95%.

 

NCLC entered into a $260 million credit agreement, dated as of May 15, 2019, with Bank of America, N.A., as administrative agent and collateral agent, and certain other lenders. The proceeds of this term loan were used to prepay the then outstanding principal and accrued interest of the Norwegian Epic term loan. The $260 million term loan is secured by Norwegian Jewel Limited, bears interest at LIBOR plus a margin of 0.80%, and matures on May 15, 2022. The transaction resulted in a loss on extinguishment of debt of $1.1 million.

 

NCLC entered into a $230 million credit agreement, dated as of January 10, 2019, with Nordea Bank ABP, New York Branch, as administrative agent and collateral agent, and certain other lenders. The proceeds of this term loan will be used for general corporate purposes, including to finance the pre-delivery installments due to the builder under the Company’s shipbuilding contracts. The $230 million term loan is secured by Pride of America Ship Holding, LLC and bears interest at LIBOR plus a margin of 1.00%. The term loan matures on January 10, 2021; however, NCLC may elect to extend the maturity date to January 10, 2022 provided certain conditions are met. Should NCLC elect to extend the maturity date, the interest rate will be LIBOR plus a margin of 1.10% for the third year.

 

NCLC entered into a Fourth Amended and Restated Credit Agreement, dated as of January 2, 2019, with a subsidiary of NCLC, as co-borrower and JPMorgan Chase Bank, N.A., as administrative agent, and certain other lenders. This revised facility, among other things, (a) reduced the pricing of our existing $875 million Revolving Loan Facility, (b) reduced the pricing and increased the approximately $1.3 billion principal amount outstanding under the term loan A facility to $1.6 billion, and (c) extended the maturity dates for our Revolving Loan Facility and our term loan A facility to 2024, subject to certain conditions. We used the proceeds from the increase in our term loan A facility to prepay all of the then outstanding amounts under our term loan B facility. The transaction resulted in a loss on extinguishment of debt of $2.9 million.

 

The applicable margin under the new term loan A facility and new Revolving Loan Facility is determined by reference to a total leverage ratio, with an applicable margin of between 1.75% and 1.00% with respect to Eurocurrency loans and between 0.75% and 0.00% with respect to base rate loans. The margin as of December 31, 2019 for borrowings under the new term loan A facility and new Revolving Loan Facility was 1.25% with respect to Eurocurrency borrowings. In addition to paying interest on outstanding principal under the borrowings, we are obligated to pay a quarterly commitment fee at a rate determined by reference to a total net leverage ratio, with a maximum commitment fee of 0.30%.

 

Interest expense, net for the year ended December 31, 2019 was $272.9 million which included $27.5 million of amortization of deferred financing fees and a $16.7 million loss on extinguishment and modification of debt. Interest expense, net for the year ended December 31, 2018 was $270.4 million which included $31.4 million of amortization of deferred financing fees and a $6.3 million loss on extinguishment of debt. Interest expense, net for the year ended.

[kent1941]

I would not be getting any future cruise credit. I expect much re-organization/Chapter 11 changes with the amount of money these companies are losing.

I think it’s better to just to get the cash


Sent from my iPhone using Forums

[Lionkingrichard]

42 minutes ago, Formula280SS said:

 

NCLH is a Publicly Traded Corporation and is subject to all SEC filing requirements (Annual, Quarterly, certain events, etc.).

 

Here is a link to the NCLH 2019 SEC 10K Annual Report

 

http://www.nclhltdinvestor.com/static-files/ebce2e02-cf0d-42ce-b3f6-4c91efcd3c9a

 

Here is a screenshot of the NCLH Debt (SEC filings are not Copywrited).

 

 

Here is the Footnotes Disclosures of the above debt that follows:

 

 

On December 16, 2019, NCLC issued $565.0 million aggregate principle amount of 3.625% senior unsecured notes due December 2024 (the “Notes”) in a private offering (the “Offering”) at par. NCLC used the net proceeds from the Offering, after deducting the initial purchasers’ discount and estimated fees and expenses, together with cash on hand, to redeem $565.0 million principal amount of outstanding 4.75% Senior Notes due 2021 at a price equal to 100% of the principal amount being redeemed and paid the premium of $6.7 million. The redemption also resulted in a write-off of $2.7 million of deferred fees.

 

NCLC will pay interest on the Notes at 3.625% per annum, semiannually on June 15 and December 15 of each year, commencing on June 15, 2020, to holders of record at the close of business on the immediately preceding June 1 and December 1, respectively. NCLC may redeem the Notes, in whole or part, at any time prior to December 15, 2021, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but not including, the redemption date and a “make-whole premium.” NCLC may redeem the Notes, in whole or in part, on or after December 15, 2021, at the redemption prices set forth in the indenture governing the Notes. At any time (which may be more than once) on or prior to December 15, 2021, NCLC may choose to redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 103.625% of the face amount thereof with an amount equal to the net proceeds of one or more equity offerings, so long as at least 60% of the aggregate principal amount of the Notes issued remains outstanding following such redemption. The indenture governing the Notes contains covenants that limit NCLC’s ability to, among other things: (i) create liens on certain assets to secure debt; (ii) enter into sale leaseback transactions; and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets. The indenture governing the Notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium (if any), interest and other monetary obligations on all of the then-outstanding Notes to become due and payable immediately.

 

On October 30, 2019, we took delivery of Norwegian Encore. We had export financing in place for 80% of the contract price. The associated $882.9 million term loan bears interest at a fixed rate of 3.92% with a maturity date of October 30, 2031. Principal and interest payments are payable semiannually.

 

In October 2019, we entered into a $75 million revolving credit line agreement that matures in October 2020 and bears interest at LIBOR plus a margin of 0.95%.

 

NCLC entered into a $260 million credit agreement, dated as of May 15, 2019, with Bank of America, N.A., as administrative agent and collateral agent, and certain other lenders. The proceeds of this term loan were used to prepay the then outstanding principal and accrued interest of the Norwegian Epic term loan. The $260 million term loan is secured by Norwegian Jewel Limited, bears interest at LIBOR plus a margin of 0.80%, and matures on May 15, 2022. The transaction resulted in a loss on extinguishment of debt of $1.1 million.

 

NCLC entered into a $230 million credit agreement, dated as of January 10, 2019, with Nordea Bank ABP, New York Branch, as administrative agent and collateral agent, and certain other lenders. The proceeds of this term loan will be used for general corporate purposes, including to finance the pre-delivery installments due to the builder under the Company’s shipbuilding contracts. The $230 million term loan is secured by Pride of America Ship Holding, LLC and bears interest at LIBOR plus a margin of 1.00%. The term loan matures on January 10, 2021; however, NCLC may elect to extend the maturity date to January 10, 2022 provided certain conditions are met. Should NCLC elect to extend the maturity date, the interest rate will be LIBOR plus a margin of 1.10% for the third year.

 

NCLC entered into a Fourth Amended and Restated Credit Agreement, dated as of January 2, 2019, with a subsidiary of NCLC, as co-borrower and JPMorgan Chase Bank, N.A., as administrative agent, and certain other lenders. This revised facility, among other things, (a) reduced the pricing of our existing $875 million Revolving Loan Facility, (b) reduced the pricing and increased the approximately $1.3 billion principal amount outstanding under the term loan A facility to $1.6 billion, and (c) extended the maturity dates for our Revolving Loan Facility and our term loan A facility to 2024, subject to certain conditions. We used the proceeds from the increase in our term loan A facility to prepay all of the then outstanding amounts under our term loan B facility. The transaction resulted in a loss on extinguishment of debt of $2.9 million.

 

The applicable margin under the new term loan A facility and new Revolving Loan Facility is determined by reference to a total leverage ratio, with an applicable margin of between 1.75% and 1.00% with respect to Eurocurrency loans and between 0.75% and 0.00% with respect to base rate loans. The margin as of December 31, 2019 for borrowings under the new term loan A facility and new Revolving Loan Facility was 1.25% with respect to Eurocurrency borrowings. In addition to paying interest on outstanding principal under the borrowings, we are obligated to pay a quarterly commitment fee at a rate determined by reference to a total net leverage ratio, with a maximum commitment fee of 0.30%.

 

Interest expense, net for the year ended December 31, 2019 was $272.9 million which included $27.5 million of amortization of deferred financing fees and a $16.7 million loss on extinguishment and modification of debt. Interest expense, net for the year ended December 31, 2018 was $270.4 million which included $31.4 million of amortization of deferred financing fees and a $6.3 million loss on extinguishment of debt. Interest expense, net for the year ended.

Great post!

 

This means they are ONLY paying 25 million a month in interest. Not much!

 

Payroll is what is hurting them right now and they just announced 20% reduced wages for salary employees. I'm sure we will find that the crews are being paid less as they are not working full time on the ships. Fair? Probably not, but they may not be able to do much about it if they want to keep their jobs next year.

 

[cementhands]

22 hours ago, Ptroxx said:

What’s everyone thoughts on this ?   
what do you think would happen if you have a paid in full cruise?? 
I have a May 2nd cruise and starting to worry a little bit with the market dumping as it is. NCL is now down to $7.xx A share.  
 

what’s everyone thoughts.  

Government bailout. Florida politicians have already suggested and others have pushed back.
Alternative use of cruise ships as floating Hospital to free up land hospitals for Coronavirus as in NYC hotels are being looked at for similar. Reading about the wide spread Spanish flu and this virus is going to take a while. Not booking any cruise anytime soon.
Once a stock gets down to $4.00 what’s it going to take to bounce back other than a miracle.

[em-sk]

14 hours ago, njhorseman said:

The ships fly a foreign flag. The cruise lines themselves are incorporated in foreign countries...not necessarily the same country as the the ships' flags.

 

 NCL ships except Pride of America are registered in the Bahamas, but NCLH, the corporate holding company, is incorporated in Bermuda. It's the country of incorporation that primarily results in the cruise line's ability to avoid federal corporate income taxes. It's the foreign flag state that permits the employment of crew at wages substantially below what would be required if registered in the US. It's two different things at play.

 

As a Canadian who usually does NCL Mediterranean cruises I don't view NCL as a US company.  Yes, they have a call center in Miami.  Why the ships should be registered in the US or under US laws if many of the cruises don't touch US soil is an interesting question.

[njhorseman]

35 minutes ago, Lionkingrichard said:

Great post!

 

This means they are ONLY paying 25 million a month in interest. Not much!

 

Payroll is what is hurting them right now and they just announced 20% reduced wages for salary employees. I'm sure we will find that the crews are being paid less as they are not working full time on the ships. Fair? Probably not, but they may not be able to do much about it if they want to keep their jobs next year.

 

Interest isn't all they have to pay. They also have principal payments that must be made . For example, from the post you're quoting:

"On October 30, 2019, we took delivery of Norwegian Encore. We had export financing in place for 80% of the contract price. The associated $882.9 million term loan bears interest at a fixed rate of 3.92% with a maturity date of October 30, 2031. Principal and interest payments are payable semiannually."

 

As far as crew wages are concerned there' a minimum guaranteed wage required under International Maritime Organization agreements and requirements. NCL can't unilaterally change that.

[njhorseman]

6 minutes ago, em-sk said:

 

As a Canadian who usually does NCL Mediterranean cruises I don't view NCL as a US company.  Yes, they have a call center in Miami.  Why the ships should be registered in the US or under US laws if many of the cruises don't touch US soil is an interesting question.

But most of the ships owned by NCL do touch US soil at some point during the year. In fact most touch US soil all year. The vast majority of NCL cruises originate in the US. The same is true of Royal Caribbean and Carnival.

[Formula280SS]

6 minutes ago, njhorseman said:

Interest isn't all they have to pay. They also have principal payments that must be made . For example, from the post you're quoting:

"On October 30, 2019, we took delivery of Norwegian Encore. We had export financing in place for 80% of the contract price. The associated $882.9 million term loan bears interest at a fixed rate of 3.92% with a maturity date of October 30, 2031. Principal and interest payments are payable semiannually."

 

As far as crew wages are concerned there' a minimum guaranteed wage required under International Maritime Organization agreements and requirements. NCL can't unilaterally change that.

 

 A couple of thoughts and some information.

 

1.  NCLH Footnotes disclose the "ships are pledged as collateral" and, reading such, it appears some are on a ship basis or group of ship basis.  With different lenders, it makes for a wider number of already vested lenders to provide liquidity (which, IMO, correctly is the issue, whether it is 3 months @ closed, 3 more @ 50% and 6 more @ 75% capacity, or worse.  It is not, IMO, a Corporate "misdeed" that has caused this and the lending institutions cannot operate the cruise lines any better than existing Corporate structure.

 

2.  NCLH Footnotes disclose the PRINCIPAL obligations out 5-years (with attention to 1-year obligations) to add to interest.

 

 

3.  NCLH Financial Statements, specifically the Balance Sheet, provide the Net Assets at the prior year end (as a side note; the Market CAP of the stock was about $1.8B yesterday; or 27% of Net Assets.  IMO, there is not a "Capitalization Issue" it is, again, a "Liquidity Issue" for an unknown, BUT NOT INDEFINITE, period of time.

 

 

 

[npcl]

2 hours ago, Formula280SS said:

 

Thanks for the discussion.

in this age where every business is hurting. almost every industry could ask of help because the problems were not of their making. where in the priority list would cruiselines be and why should it be higher than let's say hotels, resturaunts, oil industry, etc.

 

also while the White House puts it next to airlines in their talking points, the cruise lines are clearly missing from those coming from Congress. would the White House go to the mat to get cruise lines included. I doubt it.

[Formula280SS]

5 minutes ago, npcl said:

in this age where every business is hurting. almost every industry could ask of help because the problems were not of their making. where in the priority list would cruiselines be and why should it be higher than let's say hotels, resturaunts, oil industry, etc.

 

also while the White House puts it next to airlines in their talking points, the cruise lines are clearly missing from those coming from Congress. would the White House go to the mat to get cruise lines included. I doubt it.

 

Yep, every business is hurting; I can't prioritize; however, I am perplexed why the office towers, restaurants, bars, beaches, gyms are CLOSED but the 'airlines get a FREE PASS.  I just don't get it, a plane is as much (potentially more) of a petri dish than a cruise ship.

 

I don't think the Administration will go 'to the mat for the cruise industry directly or ahead of the above; the industry is going to have to "give some of the things they're being asked to give by Democratic Senators" to get anything directly or indirectly at all.

 

Personally, restaurants and bars got totally eviscerated 'overnight, followed by hotels; by the same State and Local Governments ("politicians") that kept THEIR airports open, THEIR public mass transit open, etc. IN 180 degree difference to 6' personal spacing and 10 person gatherings.

 

Yet, I don't expect much different behavior.

[Newleno]

12 hours ago, mianmike said:

 

Not a surprise really. I have felt this way ever since Trump met with the cruise industry CEOs and asked them to suspend cruises for 30 days.  I suspect there was some kind of quid pro quo offered.  "You do me a solid and I'll make sure you're made whole."  Right after the CEO meeting and the 30 day cruise suspension announcements, when talking to reporters, Trump would include the cruise industry, along with airlines and hotels that we need to care for.  

 

I agree with the President of the United States strong arm tactics to halt cruising for a period of time. Much better than actually having to mandate it in order to protect the citizens of the United States of America and the World.

[npcl]

3 hours ago, Formula280SS said:

 

NCLH is a Publicly Traded Corporation and is subject to all SEC filing requirements (Annual, Quarterly, certain events, etc.).

 

Here is a link to the NCLH 2019 SEC 10K Annual Report

 

http://www.nclhltdinvestor.com/static-files/ebce2e02-cf0d-42ce-b3f6-4c91efcd3c9a

 

Here is a screenshot of the NCLH Debt (SEC filings are not Copywrited).

 

 

Here is the Footnotes Disclosures of the above debt that follows:

 

 

On December 16, 2019, NCLC issued $565.0 million aggregate principle amount of 3.625% senior unsecured notes due December 2024 (the “Notes”) in a private offering (the “Offering”) at par. NCLC used the net proceeds from the Offering, after deducting the initial purchasers’ discount and estimated fees and expenses, together with cash on hand, to redeem $565.0 million principal amount of outstanding 4.75% Senior Notes due 2021 at a price equal to 100% of the principal amount being redeemed and paid the premium of $6.7 million. The redemption also resulted in a write-off of $2.7 million of deferred fees.

 

NCLC will pay interest on the Notes at 3.625% per annum, semiannually on June 15 and December 15 of each year, commencing on June 15, 2020, to holders of record at the close of business on the immediately preceding June 1 and December 1, respectively. NCLC may redeem the Notes, in whole or part, at any time prior to December 15, 2021, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but not including, the redemption date and a “make-whole premium.” NCLC may redeem the Notes, in whole or in part, on or after December 15, 2021, at the redemption prices set forth in the indenture governing the Notes. At any time (which may be more than once) on or prior to December 15, 2021, NCLC may choose to redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 103.625% of the face amount thereof with an amount equal to the net proceeds of one or more equity offerings, so long as at least 60% of the aggregate principal amount of the Notes issued remains outstanding following such redemption. The indenture governing the Notes contains covenants that limit NCLC’s ability to, among other things: (i) create liens on certain assets to secure debt; (ii) enter into sale leaseback transactions; and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets. The indenture governing the Notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium (if any), interest and other monetary obligations on all of the then-outstanding Notes to become due and payable immediately.

 

On October 30, 2019, we took delivery of Norwegian Encore. We had export financing in place for 80% of the contract price. The associated $882.9 million term loan bears interest at a fixed rate of 3.92% with a maturity date of October 30, 2031. Principal and interest payments are payable semiannually.

 

In October 2019, we entered into a $75 million revolving credit line agreement that matures in October 2020 and bears interest at LIBOR plus a margin of 0.95%.

 

NCLC entered into a $260 million credit agreement, dated as of May 15, 2019, with Bank of America, N.A., as administrative agent and collateral agent, and certain other lenders. The proceeds of this term loan were used to prepay the then outstanding principal and accrued interest of the Norwegian Epic term loan. The $260 million term loan is secured by Norwegian Jewel Limited, bears interest at LIBOR plus a margin of 0.80%, and matures on May 15, 2022. The transaction resulted in a loss on extinguishment of debt of $1.1 million.

 

NCLC entered into a $230 million credit agreement, dated as of January 10, 2019, with Nordea Bank ABP, New York Branch, as administrative agent and collateral agent, and certain other lenders. The proceeds of this term loan will be used for general corporate purposes, including to finance the pre-delivery installments due to the builder under the Company’s shipbuilding contracts. The $230 million term loan is secured by Pride of America Ship Holding, LLC and bears interest at LIBOR plus a margin of 1.00%. The term loan matures on January 10, 2021; however, NCLC may elect to extend the maturity date to January 10, 2022 provided certain conditions are met. Should NCLC elect to extend the maturity date, the interest rate will be LIBOR plus a margin of 1.10% for the third year.

 

NCLC entered into a Fourth Amended and Restated Credit Agreement, dated as of January 2, 2019, with a subsidiary of NCLC, as co-borrower and JPMorgan Chase Bank, N.A., as administrative agent, and certain other lenders. This revised facility, among other things, (a) reduced the pricing of our existing $875 million Revolving Loan Facility, (b) reduced the pricing and increased the approximately $1.3 billion principal amount outstanding under the term loan A facility to $1.6 billion, and (c) extended the maturity dates for our Revolving Loan Facility and our term loan A facility to 2024, subject to certain conditions. We used the proceeds from the increase in our term loan A facility to prepay all of the then outstanding amounts under our term loan B facility. The transaction resulted in a loss on extinguishment of debt of $2.9 million.

 

The applicable margin under the new term loan A facility and new Revolving Loan Facility is determined by reference to a total leverage ratio, with an applicable margin of between 1.75% and 1.00% with respect to Eurocurrency loans and between 0.75% and 0.00% with respect to base rate loans. The margin as of December 31, 2019 for borrowings under the new term loan A facility and new Revolving Loan Facility was 1.25% with respect to Eurocurrency borrowings. In addition to paying interest on outstanding principal under the borrowings, we are obligated to pay a quarterly commitment fee at a rate determined by reference to a total net leverage ratio, with a maximum commitment fee of 0.30%.

 

Interest expense, net for the year ended December 31, 2019 was $272.9 million which included $27.5 million of amortization of deferred financing fees and a $16.7 million loss on extinguishment and modification of debt. Interest expense, net for the year ended December 31, 2018 was $270.4 million which included $31.4 million of amortization of deferred financing fees and a $6.3 million loss on extinguishment of debt. Interest expense, net for the year ended.

Yes but unlike the other two, NCLH does not have any publicly traded bond offerings as a result we have no way to value how that debt is perceived. Where as with CCL and RCL we know that there bonds are trading at junk YTM levels (near the worst of the BBB rated companies)

 

And while some of the bank loans are known, others are listed as private placement.  So we do not have the transparency into all of the debt holders.  

 

 

 

[npcl]

1 hour ago, Formula280SS said:

 

Yep, every business is hurting; I can't prioritize; however, I am perplexed why the office towers, restaurants, bars, beaches, gyms are CLOSED but the 'airlines get a FREE PASS.  I just don't get it, a plane is as much (potentially more) of a petri dish than a cruise ship.

 

I don't think the Administration will go 'to the mat for the cruise industry directly or ahead of the above; the industry is going to have to "give some of the things they're being asked to give by Democratic Senators" to get anything directly or indirectly at all.

 

Personally, restaurants and bars got totally eviscerated 'overnight, followed by hotels; by the same State and Local Governments ("politicians") that kept THEIR airports open, THEIR public mass transit open, etc. IN 180 degree difference to 6' personal spacing and 10 person gatherings.

 

Yet, I don't expect much different behavior.

I would very much disagree that airplanes are as much of a petri dish.  On an airplane you are within 6 feet of maybe 20 people and have incidental contact for a short amount of time with others during the loading and unloading process.  The surfaces areas that you come in contact with can be cleaned (air rests, tables, etc).  The air is HEPA filtered, you have air vents above you that can be adjusted to max flow down upon you to keep air flow from those with 6 feet of you away from you.

You are also on the plane for hours and the positioning is relatively static during that time.  Overall not too bad unless you have a seat near the restroom where exposure is potentially much worse. More likely for exposure in the airports than on the plane itself.

 

On a ship you are on board with hundreds or thousands in relatively close proximity for several days, even weeks.

  Unless you stay in your cabin, you are in close proximity with an ever changing group in the buffet, dining facilities, lounges, theater, around the pool areas, elevators. You are using the same railing, seating, tables, etc as everyone else.  You are being served by crew members that also serve the rest of the ship.  The air systems use recirculated air in public spaces, with minimal filters.  You are in close proximity with others every time you leave the ship, especially on tenders.  Whenever there is a port you have the chance of someone to encounter an illness and if the cruise is longer enough time for it to spread.

 

Since cruise crud is a fairly popular phrase it gives a good idea exactly how good the environment is for spread URIs.

 

But even with those differences the biggest one is cruising is a vacation, totally voluntary activity.  Planes on the other hand are fairly essential for a number of economic activities.

[mianmike]

7 hours ago, Love my butler said:

You seem to want to put a negative slant on 'quid pro quo'.  Guess what?  It is how business is done, all over the world.  Has been like that for centuries.  It's ok.  I blame the fake news media for feeding the ignorance to the masses.

 

Please explain your comment.  Where do you get: "You seem to want to put a negative slant on 'quid pro quo'" from what I said?  The "fake news media" does air live the President's press conferences where he talks about his intentions.  The press conferences don't seem "fake" to me.  Unless you are suggesting the media is making deepfake videos of the President's press conferences? 

[npcl]

1 hour ago, Formula280SS said:

 

Yep, every business is hurting; I can't prioritize; however, I am perplexed why the office towers, restaurants, bars, beaches, gyms are CLOSED but the 'airlines get a FREE PASS.  I just don't get it, a plane is as much (potentially more) of a petri dish than a cruise ship.

 

I don't think the Administration will go 'to the mat for the cruise industry directly or ahead of the above; the industry is going to have to "give some of the things they're being asked to give by Democratic Senators" to get anything directly or indirectly at all.

 

Personally, restaurants and bars got totally eviscerated 'overnight, followed by hotels; by the same State and Local Governments ("politicians") that kept THEIR airports open, THEIR public mass transit open, etc. IN 180 degree difference to 6' personal spacing and 10 person gatherings.

 

Yet, I don't expect much different behavior.

As far as cruise line behavior.  I do put some blame on management is that they had large amounts of liabilities in passenger deposits, but very little cash on hand.  Comparing that to the airlines at least the airlines cash on hand and short terms investments  tended to equal their liabilities for pre-sold tickets.  Compared to the cruise lines where the liabilities for deposits were 7-10 times the amount of cash on hand.  

 

Lesson learned from this is the cruise lines need to keep a higher percentage of that cash on hand and maybe slow down their building programs, stock buy backs, bonuses.  The airlines learned after 9-11.  Though it won't totally save them in this situation it did give them much more breathing room than the cruise lines.  The airlines have one major problem that the cruise lines don't which is the unionization of their employees.  That limits their ability to slow cash flow. Of course it also means that they will get support from both sides of the aisle in getting some relief.

[Formula280SS]

3 minutes ago, npcl said:

I would very much disagree that airplanes are as much of a petri dish.  On an airplane you are within 6 feet of maybe 20 people and have incidental contact for a short amount of time with others during the loading and unloading process.  The surfaces areas that you come in contact with can be cleaned (air rests, tables, etc).  The air is HEPA filtered, you have air vents above you that can be adjusted to max flow down upon you to keep air flow from those with 6 feet of you away from you.

You are also on the plane for hours and the positioning is relatively static during that time.  Overall not too bad unless you have a seat near the restroom where exposure is potentially much worse. More likely for exposure in the airports than on the plane itself.

 

On a ship you are on board with hundreds or thousands in relatively close proximity for several days, even weeks.

  Unless you stay in your cabin, you are in close proximity with an ever changing group in the buffet, dining facilities, lounges, theater, around the pool areas, elevators. You are using the same railing, seating, tables, etc as everyone else.  You are being served by crew members that also serve the rest of the ship.  The air systems use recirculated air in public spaces, with minimal filters.  You are in close proximity with others every time you leave the ship, especially on tenders.  Whenever there is a port you have the chance of someone to encounter an illness and if the cruise is longer enough time for it to spread.

 

Since cruise crud is a fairly popular phrase it gives a good idea exactly how good the environment is for spread URIs.

 

But even with those differences the biggest one is cruising is a vacation, totally voluntary activity.  Planes on the other hand are fairly essential for a number of economic activities.

 

Not getting into a detailed response to the reply because it is outside the scope of what I intended to refer to and highlight; although I disagree immensely with the specifics identified.

 

Again, I just would like to point out the inconsistency in the application of 6' spacing and 10 person grouping when it comes to airlines versus restaurants, bars, hotel and cruise lines. 

 

These "were all essentially shut down" by the Federal, State and Local governments.

 

The airlines, the public airports, mass transit "we not shut down" and are allowed to continue in complete exception to the two basis standards that has 'closed everyone else down.

 

I also do not believe that air travel essential (to prevent the collapse of the economy) during this current 2-3 week period of requested (actually ordered) 6' spacing and 10 group requirements and limitations.

 

Just IMO.

 

 

 

 

[npcl]

3 hours ago, Lionkingrichard said:

Great post!

 

This means they are ONLY paying 25 million a month in interest. Not much!

 

Payroll is what is hurting them right now and they just announced 20% reduced wages for salary employees. I'm sure we will find that the crews are being paid less as they are not working full time on the ships. Fair? Probably not, but they may not be able to do much about it if they want to keep their jobs next year.

 

NCLH has 746 million in debt coming due in 2020

 

 

[Formula280SS]

2 minutes ago, npcl said:

As far as cruise line behavior.  I do put some blame on management is that they had large amounts of liabilities in passenger deposits, but very little cash on hand.  Comparing that to the airlines at least the airlines cash on hand and short terms investments  tended to equal their liabilities for pre-sold tickets.  Compared to the cruise lines where the liabilities for deposits were 7-10 times the amount of cash on hand.  

 

Lesson learned from this is the cruise lines need to keep a higher percentage of that cash on hand and maybe slow down their building programs, stock buy backs, bonuses.  The airlines learned after 9-11.  Though it won't totally save them in this situation it did give them much more breathing room than the cruise lines.  The airlines have one major problem that the cruise lines don't which is the unionization of their employees.  That limits their ability to slow cash flow. Of course it also means that they will get support from both sides of the aisle in getting some relief.

 

Regarding holding passenger deposits, I agree; however, I'd like to see an aging of how much is stratified by months ahead of cruise dates.  Again, I agree and I think you are 'on point on that.  Also keeping funds on canceled cruises and limiting to FCC keeps them leveraged-liquid with funds not intended to do that.

 

Regarding airlines, I don't have the some current research understanding of the fundamentals; however, if they 'straightened, why do they need $50-$75 billion already?  I don't have the answer at all, just wondering.

 

Thanks for the discussion.

[Newleno]

15 minutes ago, npcl said:

I would very much disagree that airplanes are as much of a petri dish.  On an airplane you are within 6 feet of maybe 20 people and have incidental contact for a short amount of time with others during the loading and unloading process.  The surfaces areas that you come in contact with can be cleaned (air rests, tables, etc).  The air is HEPA filtered, you have air vents above you that can be adjusted to max flow down upon you to keep air flow from those with 6 feet of you away from you.

You are also on the plane for hours and the positioning is relatively static during that time.  Overall not too bad unless you have a seat near the restroom where exposure is potentially much worse. More likely for exposure in the airports than on the plane itself.

 

On a plane people are coughing and sneezing all around you, you cant run you cant hide.  Oh please no one is cleaning surfaces in between flights, probably not even at night.  I had many a filthy tray table, Lot of old planes out there just filled with 15 year old 737 compartment dust right above your head, not to mention the filthy toilet rooms.  Please people do not fly and if you do fly self quarantine for 14 days, I feel so bad for the grocery workers, airline workers, and health care providers literally putting their life at risk for others.  Do Not Fly unless it is essential.

[npcl]

27 minutes ago, Formula280SS said:

 

Not getting into a detailed response to the reply because it is outside the scope of what I intended to refer to and highlight; although I disagree immensely with the specifics identified.

 

Again, I just would like to point out the inconsistency in the application of 6' spacing and 10 person grouping when it comes to airlines versus restaurants, bars, hotel and cruise lines. 

 

These "were all essentially shut down" by the Federal, State and Local governments.

 

The airlines, the public airports, mass transit "we not shut down" and are allowed to continue in complete exception to the two basis standards that has 'closed everyone else down.

 

I also do not believe that air travel essential (to prevent the collapse of the economy) during this current 2-3 week period of requested (actually ordered) 6' spacing and 10 group requirements and limitations.

 

Just IMO.

 

 

 

 

They have also put out that airline travel should be limited to essential travel only.  In most cases the spacing on planes is taking care of itself since the airline load factor on the 30% of the flights still flying is 50% and dropping.  As such they are still somewhat available for essential travel, but the public is certainly not flying (except to maybe Florida and Texas, which will probably have interesting results due to the impact of spring break grouping)

 

Also keep in mind that the flights have been stopped to many areas and there is the potential to stop domestic flights. (I vote for stopping them to/from Florida during spring break)

 

 

Also cruise ships have been problematic when cases have shown up on board. 

 

I spent over 100 days on various cruise ships last year, and had planned to do the same this year. While I do not blame the cruise industry for their current problems I also do not consider that the US government owes anything to the industry. We may have shut ports, but so has just about every other country around the world

Edited March 19, 2020 by npcl