susiesan Posted February 10, 2022 #1 Share Posted February 10, 2022 Can someone translate this into plain English for the economically challenged here and indicate if this will have any bearing on Oceania's operations? https://www.nclhltd.com/investors/news-events/press-releases/detail/465/ncl-corporation-ltd-announces-proposed-offerings-of-senior Link to comment Share on other sites More sharing options...
NattilyAttired Posted February 10, 2022 #2 Share Posted February 10, 2022 They are raising more money by selling more long-term notes (debt) in several forms. Some of the proceeds will be used to pay off existing debts (interest-bearing notes). Some of the new debt will be secured by three vessels, while some of the debt will be unsecured. Based on what I read here, nothing should compromise their cruise operations. They need more cash to weather the Covid storm, and this move will help them do that. At least, that's the plan. 4 Link to comment Share on other sites More sharing options...
Aloha 1 Posted February 10, 2022 #3 Share Posted February 10, 2022 It's a good report and the market recognized that. Link to comment Share on other sites More sharing options...
PhD-iva Posted February 10, 2022 #4 Share Posted February 10, 2022 2 minutes ago, Aloha 1 said: It's a good report and the market recognized that. Stock’s down 4.5% at the moment, going into the bell……. Link to comment Share on other sites More sharing options...
Aloha 1 Posted February 10, 2022 #5 Share Posted February 10, 2022 1 minute ago, PhD-iva said: Stock’s down 4.5% at the moment, going into the bell……. Everything is down today after Fed member Bullard opened his big mouth and said the Fed needed to raise rates a whole percentage point right now. Up strong yesterday when the financials came out. Link to comment Share on other sites More sharing options...
Rare Hlitner Posted February 10, 2022 #6 Share Posted February 10, 2022 Reading this type of financial report is not everyone's idea of fun. I often like to read these (and annual reports) from the back end..forward. NCLH, just like most of the other cruise corporations has been bleeding cash and an alarming rate. The lines had hoped to be back to normal operations by now and this has obviously been delayed by Omicron and the continued port/travel restrictions. Some might want to consider reading the section (near the end of the report) titled, "Cautionary Statement Concerning Forward-Looking Statements" This is akin to various notes (often required by the auditing firm) found in Annual Financial Reports. We found some of the cautions to be interesting and concerning. Putting all this in perspective folks need to to look at the industry through clear (not rose colored) glasses. There is a limit to how much NCLH and other cruise corporations can lose (month over month) before the company gets into deep financial trouble. The survival of the cruise corporations (under their current structure) is very dependent on getting operations back on a normal track with bookings at or near capacity. This is not happening as predicted and has presented new challenges to all the cruise lines. Folks might want to consider that Future Cruise Credits have very little value in cases of bankruptcy. Can cruise lines go bankrupt? Well, those of us who have been around a few years can remember Regency and Renaissance. And now it appears that we can add Crystal to that list (although the final chapter has yet to be written on this cruise line). I am optimistic about the future of cruising but am also hedging my bet by not accepting Future Cruise Credits in lieu of refunds for cancelled cruises. At the moment many things are working against this industry including very high fuel prices and the increasing cost of food products. All the lines have lots of long term and medium term debt which will likely be impacted by the interest rate increases we are likely to see in the next couple of years. Hank 2 Link to comment Share on other sites More sharing options...
PhD-iva Posted February 10, 2022 #7 Share Posted February 10, 2022 2 minutes ago, Hlitner said: Reading this type of financial report is not everyone's idea of fun. "Folks might want to consider that Future Cruise Credits have very little value in cases of bankruptcy. Can cruise lines go bankrupt? Well, those of us who have been around a few years can remember Regency and Renaissance. And now it appears that we can add Crystal to that list (although the final chapter has yet to be written on this cruise line). I am optimistic about the future of cruising but am also hedging my bet by not accepting Future Cruise Credits in lieu of refunds I am no expert on this topic, but I have read on these boards that there is a (US govt agency) reserve to refund deposits made for cruises that depart from US ports. Anyway, hope so! Link to comment Share on other sites More sharing options...
Rare Hlitner Posted February 10, 2022 #8 Share Posted February 10, 2022 Just now, PhD-iva said: I am no expert on this topic, but I have read on these boards that there is a (US govt agency) reserve to refund deposits made for cruises that depart from US ports. Anyway, hope so! I have never heard of any such "reserve" so would love to see a link to the information. That being said, deposits would normally have some protection under Federal Law as long as the deposit was made using a major credit card (this only applies to those in the USA). My comment was specific to Future Cruise Credits that many have received in the past 2 years as the result of cancelled cruises. The FCCs are not really guaranteed by anything other then the cruise lines. FCCs are simply a liability (essentially an accounts payable) on a cruise line's balance sheet. But if a line ceases operations those FCCs are worthless (unless a bankruptcy court finds otherwise). Hank Link to comment Share on other sites More sharing options...
Rare pinotlover Posted February 10, 2022 #9 Share Posted February 10, 2022 Thus my earlier comments about whether I want to put down deposits on the upcoming cruise release. Looks like they’re going for just over $2 Billion. 1000 + 600 + 435 million. No indication of the coupon rates. Like Hank, a couple of the exclusions caught my eye! Link to comment Share on other sites More sharing options...
njhorseman Posted February 10, 2022 #10 Share Posted February 10, 2022 (edited) 51 minutes ago, PhD-iva said: I am no expert on this topic, but I have read on these boards that there is a (US govt agency) reserve to refund deposits made for cruises that depart from US ports. Anyway, hope so! 46 minutes ago, Hlitner said: I have never heard of any such "reserve" so would love to see a link to the information. That being said, deposits would normally have some protection under Federal Law as long as the deposit was made using a major credit card (this only applies to those in the USA). My comment was specific to Future Cruise Credits that many have received in the past 2 years as the result of cancelled cruises. The FCCs are not really guaranteed by anything other then the cruise lines. FCCs are simply a liability (essentially an accounts payable) on a cruise line's balance sheet. But if a line ceases operations those FCCs are worthless (unless a bankruptcy court finds otherwise). Hank Every cruise line embarking passengers in the US is required by Federal Maritime Commission rules to post a surety bond or other form of financial guarantee that covers the refunding of US-embarking passenger fares for cancelled cruises in the event of the cruise line's inability to make refunds. At present the maximum bond required of each cruise line is $32 million. https://www.fmc.gov/resources-services/passenger-vessel-operators/ PVO PERFORMANCE CERTIFICATES A PVO must apply for and obtain a FMC-issued Performance Certificate before advertising or booking passengers on a cruise embarking passengers at U.S. ports. The actual coverage amount is determined by the Commission (currently capped at $32 million). PVOs that hold FMC Performance Certificates are required to provide unearned passenger revenue reports (46 CFR § 540.9) to the Commission. Performance Certificates: serve as evidence that the PVO has on file with the Commission acceptable coverage (46 CFR Part 540 Subpart A) to satisfy any liability incurred for failure to perform the cruise are used to reimburse cruise passengers for the water portion of their fare evidence financial responsibility established by insurance, guaranties, and escrow account (46 CFR § 540.5), or by surety bond (46 CFR § 540.6) Edited February 10, 2022 by njhorseman 2 Link to comment Share on other sites More sharing options...
cruisingsfun Posted February 10, 2022 #11 Share Posted February 10, 2022 There is a bright spot for having NCLH stock. Just need 100 shares to get some really good OBCs on cruises. Link to comment Share on other sites More sharing options...
njhorseman Posted February 10, 2022 #12 Share Posted February 10, 2022 1 hour ago, PhD-iva said: Stock’s down 4.5% at the moment, going into the bell……. 1 hour ago, Aloha 1 said: Everything is down today after Fed member Bullard opened his big mouth and said the Fed needed to raise rates a whole percentage point right now. Up strong yesterday when the financials came out. NCLH stock closed today with a far greater loss, 4.60%, than the market as a whole and even worse when compared to Royal Caribbean, -0.25%, and Carnival, -0.30% . 1 Link to comment Share on other sites More sharing options...
Aloha 1 Posted February 11, 2022 #13 Share Posted February 11, 2022 15 hours ago, njhorseman said: NCLH stock closed today with a far greater loss, 4.60%, than the market as a whole and even worse when compared to Royal Caribbean, -0.25%, and Carnival, -0.30% . Just supposition but NCLH was the only company to say they would participate in the voluntary CDC program. Then the CDC released their program yesterday. No other cruise line has signed on. Is it possible investors took note of this and feared future revenue streams would be impacted? Per Cruise Critic, NCLH is now reconsidering being part of the CDC program. Link to comment Share on other sites More sharing options...
MEFIowa Posted February 11, 2022 #14 Share Posted February 11, 2022 18 hours ago, susiesan said: Can someone translate this into plain English for the economically challenged here and indicate if this will have any bearing on Oceania's operations? It is all tied to DEBT and interest rates and debt payments. A key here: "NCLC intends to use the net proceeds from the Notes Offering and the Exchangeable Notes Offering to redeem all of the outstanding 12.25% Secured Notes and 10.250% Secured Notes (each as defined below) and to make principal payments on debt maturing in the short-term, including, in each case, to pay any accrued and unpaid interest thereon, as well as related premiums, fees and expenses." As for the 3 ships and collateral, unless I missed it, they didn't specify which 3 ships. IF they are the older R-class ships, makes sense since these do have a finite cost-effective life (as they age they get more expensive to maintain and operate). If they are Marina, Riviera & Vista.... Link to comment Share on other sites More sharing options...
Rare pinotlover Posted February 11, 2022 #15 Share Posted February 11, 2022 40 minutes ago, MEFIowa said: It is all tied to DEBT and interest rates and debt payments. A key here: "NCLC intends to use the net proceeds from the Notes Offering and the Exchangeable Notes Offering to redeem all of the outstanding 12.25% Secured Notes and 10.250% Secured Notes (each as defined below) and to make principal payments on debt maturing in the short-term, including, in each case, to pay any accrued and unpaid interest thereon, as well as related premiums, fees and expenses." As for the 3 ships and collateral, unless I missed it, they didn't specify which 3 ships. IF they are the older R-class ships, makes sense since these do have a finite cost-effective life (as they age they get more expensive to maintain and operate). If they are Marina, Riviera & Vista.... A couple of points you missed. 1. These notes are from NCL, not NCLH, therefore the three ships used for security will be their ships not Oceania ships. 2. The three ships are securing $1 Billion in Notes. All of Oceania R ships combined aren’t worth $1 Billion. It’s doubtful the two O ships plus Vista would be worth $1 billion either. The three ships would have to be NCL’s newer mega ships. Link to comment Share on other sites More sharing options...
DrHemlock Posted February 11, 2022 #16 Share Posted February 11, 2022 (edited) Another non-accountant here so please be gentle. If I were paying 12.25% and 10.25% on current debt, as per the above, and could borrow at a lower rate today to pay it off and have money in the bank, why would I not do so? Or am I failing to grasp that the new debt in this example will not, in fact, be at a lower rate? Edited February 11, 2022 by DrHemlock 1 Link to comment Share on other sites More sharing options...
MEFIowa Posted February 11, 2022 #17 Share Posted February 11, 2022 5 minutes ago, pinotlover said: A couple of points you missed. 1. These notes are from NCL, not NCLH, therefore the three ships used for security will be their ships not Oceania ships. ... The release opens like this: "NCL Corporation Ltd. (“NCLC”), a subsidiary of Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (“NCLH”), announced today..." Then it says: "The Secured Notes and the related guarantees will be secured by first-priority interests in, among other things and subject to certain agreed security principles, three of our vessels. The Secured Notes will be guaranteed by our subsidiaries that own the property that will secure the Secured Notes." I note that PLURAL, "guaranteed by our subsidiaries". So one might have to be corporate lawyer to make absolute sense of who is on the hook here for exactly what. Link to comment Share on other sites More sharing options...
njhorseman Posted February 11, 2022 #18 Share Posted February 11, 2022 15 minutes ago, MEFIowa said: The release opens like this: "NCL Corporation Ltd. (“NCLC”), a subsidiary of Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (“NCLH”), announced today..." Then it says: "The Secured Notes and the related guarantees will be secured by first-priority interests in, among other things and subject to certain agreed security principles, three of our vessels. The Secured Notes will be guaranteed by our subsidiaries that own the property that will secure the Secured Notes." I note that PLURAL, "guaranteed by our subsidiaries". So one might have to be corporate lawyer to make absolute sense of who is on the hook here for exactly what. It's normal practice for each of the NCL ships to be owned by a separate subsidiary corporation so that explains the use of the plural "subsidiaries". Link to comment Share on other sites More sharing options...
MEFIowa Posted February 11, 2022 #19 Share Posted February 11, 2022 7 minutes ago, njhorseman said: It's normal practice for each of the NCL ships to be owned by a separate subsidiary corporation so that explains the use of the plural "subsidiaries". So which specific subsidiaries are on the hook for which 3 specific ships? "The Secured Notes will be guaranteed by our subsidiaries that own the property that will secure the Secured Notes." Link to comment Share on other sites More sharing options...
njhorseman Posted February 11, 2022 #20 Share Posted February 11, 2022 Just now, MEFIowa said: So which specific subsidiaries are on the hook for which 3 specific ships? "The Secured Notes will be guaranteed by our subsidiaries that own the property that will secure the Secured Notes." As what you quoted says, the subsidiaries that own the ships that are pledged as collateral . It's NCLC, not NCLH, that's borrowing the money, so it will be NCL ships securing the notes. NCLC is the parent of the NCL ships, not Oceania or Regent Seven Seas ships . 1 Link to comment Share on other sites More sharing options...
Hawaiidan Posted February 11, 2022 #21 Share Posted February 11, 2022 20 hours ago, PhD-iva said: I am no expert on this topic, but I have read on these boards that there is a (US govt agency) reserve to refund deposits made for cruises that depart from US ports. Anyway, hope so! On the otherhand you won't loose an money as with the present inflation it will be so devalued that you won't care.................. 1 Link to comment Share on other sites More sharing options...
jonthomas Posted February 12, 2022 #22 Share Posted February 12, 2022 How much in OBCs do you get if you have stock? How many shares do you need? Is it a good time to buy? Link to comment Share on other sites More sharing options...
Rare LHT28 Posted February 12, 2022 #23 Share Posted February 12, 2022 2 hours ago, jonthomas said: How much in OBCs do you get if you have stock? How many shares do you need? Is it a good time to buy? you need to own a minimum of 100 shares The OBC will vary depending on the length of the cruise but max is $250 scroll to bottom of page then click on "Shareholder Benefit offer" https://www.nclhltd.com/investors 1 Link to comment Share on other sites More sharing options...
jonthomas Posted February 12, 2022 #24 Share Posted February 12, 2022 ah yes similar to Celeb... we no longer sail Celeb, so just have the stock...earns almost nothing in dividends... good time to buy NCL? Link to comment Share on other sites More sharing options...
jonthomas Posted February 12, 2022 #25 Share Posted February 12, 2022 since NCL owns O, can we use the OBCs for O? Link to comment Share on other sites More sharing options...
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