NCLH

Business Context and Reporting Period

This Form 8-K Current Report, dated September 17, 2024, is filed by Norwegian Cruise Line Holdings Ltd. (NCLH). The report details a material definitive agreement entered into by its subsidiary, NCL Corporation Ltd. (NCLC), involving a private offering of senior notes and the subsequent redemption of existing debt.

Key Financial Metrics and Transaction Details

• New Debt Issuance: NCLC issued $315.0 million aggregate principal amount of 6.250% senior notes due 2030.
• Net Proceeds: Approximately $311.5 million (after initial purchasers' discount, before fees and expenses).
• Debt Redemption: Proceeds and cash on hand were used to redeem $315.0 million of 3.625% senior notes due 2024, including accrued interest.
• Interest Terms: New notes accrue interest at 6.250% per year, payable semi-annually starting March 1, 2025.
• Maturity: The new notes mature on March 1, 2030.

Material Changes Versus Prior Period

The primary material change is the refinancing of debt maturing in 2024 with new debt maturing in 2030. This transaction extends the maturity profile of the company's debt obligations by six years. However, the interest rate on the new debt (6.250%) is higher than the rate on the redeemed debt (3.625%), which will increase future interest expense. The filing does not provide comparative revenue, profit, or cash flow metrics for the period.

Guidance, Outlook, and Covenants

Redemption Options:

• Make-Whole: Prior to March 1, 2027, NCLC may redeem notes at 100% of principal plus a make-whole amount.
• Equity Redemption: Prior to March 1, 2027, NCLC may redeem up to 40% of the notes using proceeds from equity offerings at 106.250% of principal.
• Standard Call: On or after March 1, 2027, notes may be redeemed at prices set forth in the Indenture.

Covenants: The Indenture restricts NCLC and its subsidiaries from granting certain liens, entering into sale-leaseback transactions, and consolidating or disposing of substantially all assets. A change of control may trigger a mandatory repurchase offer at 101% of principal.

Forward-Looking Statements: The filing includes standard disclaimers regarding risks and uncertainties that could cause actual results to differ from projections. No specific financial guidance or outlook is provided in this document.

Investor Verification Checklist

• Verify the total interest expense impact of replacing 3.625% debt with 6.250% debt.
• Confirm the exact amount of cash on hand used alongside the new proceeds to fund the redemption.
• Review the full text of the Indenture (Exhibit 4.1) for specific definitions of "make-whole" calculations and change of control triggers.
• Assess the company's liquidity position post-transaction, noting the extension of debt maturity.