Norwegian Cruise Line receives credit rating upgrade from S&P Global

Tuesday, March 12, 2024

NCL Corporation Ltd. (referred to as “NCLC” or “Norwegian”), a subsidiary of Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), has recently received an upgrade in its issuer credit rating and issue-level ratings by S&P Global Ratings (S&P). The issuer credit rating for NCLC has been raised to B+, indicating a significant enhancement in the Company’s creditworthiness. Moreover, S&P has elevated the issue-level ratings on NCLC’s existing secured and unsecured debt. Specifically, the senior secured debt ratings have been upgraded to BB/BB-, while the unsecured debt rating has been raised by two notches to B.

The upgrade by S&P is attributed to various factors, including NCLC’s strong forward-booked position, expanded capacity, occupancy recovery, and improved pricing, which contribute to favorable revenue and cash flow visibility for 2024. Additionally, S&P highlighted that the Company’s leverage will benefit from increased revenue, EBITDA, and cash flow as it experiences a full year of operations from its 2023 ship deliveries, without incurring additional ship delivery debt in 2024.

In a move to further bolster its financial standing, on March 7, 2024, the Company successfully concluded the refinancing of its $650 million backstop commitment. This commitment has been refinanced from secured to unsecured, and as part of this process, the Company has repaid its $250 million 9.75% senior secured notes due 2028, thereby eliminating its highest interest rate debt.

“The upgraded ratings are an important recognition of the strength of our business and our ability to reduce leverage,” commented Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd. He continued, “Our recent refinancing, which reduces interest costs while releasing the related collateral, is a clear demonstration of our commitment to de-levering and improving our balance sheet.”

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