NCL Corporation Ltd., a subsidiary of Norwegian Cruise Line Holdings Ltd., has recently received an upgrade in its credit ratings from S&P Global Ratings (S&P). The issuer credit rating has been raised to B+, while the issue-level ratings on the existing secured and unsecured debt have also seen an increase.
S&P attributed the upgrade to several key factors, including NCLC’s current forward-booked position, increased capacity, occupancy recovery, and higher pricing providing good revenue and cash flow visibility for 2024. The company's leverage is expected to benefit from higher revenue, EBITDA, and cash as it generates a full year of operations from its 2023 ship deliveries without incurring incremental ship delivery debt in 2024.
In a move to further enhance its financial position, the company successfully completed the refinancing of its $650 million backstop commitment. This commitment has been refinanced from a secured to an unsecured commitment, and as part of this refinancing, the company has repaid its $250 million 9.75% senior secured notes due 2028, eliminating its highest interest rate debt.
Mark A. Kempa, Executive Vice President and Chief Financial Officer of Norwegian Cruise Line Holdings Ltd., expressed that the upgraded ratings are an important recognition of the strength of their business and their ability to reduce leverage. He also highlighted the recent refinancing as a clear demonstration of the company's commitment to deleveraging and improving its balance sheet.
Norwegian Cruise Line Holdings Ltd. operates Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises, with a combined fleet of 32 ships and approximately 66,500 berths. The company has five additional ships scheduled for delivery across its three brands, which will add approximately 16,000 berths to its fleet.
Today the company's shares have moved -2.1% to a price of $19.39. If you want to know more, read the company's complete 8-K report here.
