Norwegian Cruise Line Holdings Ltd. is offering about $2 billion of notes to refinance the expensive debt it took out in 2020 to weather the global lockdowns amid the pandemic, Bloomberg News reported. The company will tap the junk-bond market to sell $1 billion of secured notes due in 2027 and $600 million of unsecured notes due in 2029, according to a statement on Thursday. It is also offering $435 million of exchangeable notes due 2027 in a private offering. Price guidance on the deal tightened slightly with books expected to close at 2:30 p.m. in New York on Thursday. The secured portion of the deal is now discussed in the 6% area, while talk for the unsecured tranche is for a yield in the 7.75%-8% range. Earlier pricing discussions for the secured notes were in the 6.25%-6.5% area, while the unsecured notes were being discussed at a yield of 8%-8.25%. The secured debt is rated B1/B+, four steps into junk. JPMorgan Chase & Co. is leading the sale. Norwegian Cruise Line will use the proceeds to redeem all of its outstanding 12.25% notes and 10.25% notes, and to make principal payments on short-term debt that’s maturing, according to the statement. The secured notes and the related guarantees are backed by three of the company’s vessels.
