Business Context and Reporting Period
Company: Lindblad Expeditions Holdings, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 8, 2018
Event: Entry into a Material Definitive Agreement regarding vessel financing.
Key Financial Metrics and Debt Structure
This filing details a new debt facility rather than operational financial results. Key terms include:
- Loan Amount: Up to $107,694,892 in aggregate principal.
- Purpose: Financing up to 80% of the purchase price for a new expedition ice-class cruise vessel (target completion: January 2020).
- Guarantees: 70% of the loan is guaranteed by Garantiinstituttet for eksportkreditt (GIEK), Norway's official export credit agency. The Company guarantees all obligations of the Borrower.
- Interest Rate: Borrower's option between a fixed rate of 5.78% or a floating rate of three-month LIBOR plus 3.00%.
- Amortization: Quarterly payments over a twelve-year profile (70% maturing over 12 years; 30% maturing over 5 years).
- Collateral: First priority mortgage on the new vessel and assignment of related insurances.
Material Changes and Unusual Items
The filing reports the creation of a direct financial obligation. No operational revenue, profit, or cash flow changes are reported in this document. The material change is the establishment of the credit facility with Citibank, N.A., London Branch and Eksportkreditt Norge AS.
Guidance, Risks, and Contingencies
- Conditions Precedent: The loan is available at the Borrower's option subject to certain conditions and will be drawn upon at the time of vessel delivery.
- Events of Default: Includes non-payment, breach of covenants, default on other indebtedness, large judgments, and change of control.
- Fees: Borrower must pay customary coordination, arrangement, agency, collateral, and commitment fees in addition to interest.
- Prepayment: Voluntary prepayment is allowed subject to customary breakage costs.
Investor Verification Checklist
- Verify the full terms of the Credit Agreement in the upcoming Form 10-Q for the quarter ending March 31, 2018.
- Confirm the status of the new vessel construction and the likelihood of delivery by January 2020.
- Assess the impact of the new debt service obligations on future cash flows once the loan is drawn.
- Review the specific covenants and conditions precedent required to draw down the funds.