Annual report pursuant to Section 13 and 15(d)

Long-Term Debt

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Long-Term Debt
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Long-Term Debt
6. Long-Term Debt

 

Long-term debt consisted of the following:

  

    Interest Rate
December 31,
    Maturities     Balance
December 31,
 
    2017     2016     Through     2017     2016  
                      (in thousands)  
                               
$875.0 million senior secured revolving credit facility     3.27 %           2021     $ 78,000     $  
$750.0 million senior secured revolving credit facility           2.70 %     2021             129,000  
Term Loan A     3.32 %           2021       1,385,196        
$1,506.6 million term loan A facility           2.77 %     2021             1,459,033  
$375.0 million Term Loan B (1)     3.18 %           2021       371,914        
$700.0 million 4.750% senior unsecured notes     4.75 %     4.75 %     2021       693,413       691,767  
$600.0 million 4.625% senior unsecured notes           4.63 %     2020             592,031  
€662.9 million Norwegian Epic term loan (2)     3.44 %     3.00 %     2022       328,646       395,830  
€308.1 million Pride of Hawai’i loan (2)     2.31 %     1.83 %     2018       18,438       54,601  
$334.1 million Norwegian Jewel term loan           1.83 %     2017             26,919  
€258.0 million Pride of America Hermes loan (2)           1.90 %     2017             12,654  
€529.8 million Breakaway one loan (2)     2.97 %     2.49 %     2025       415,039       469,100  
€529.8 million Breakaway two loan (2)     4.50 %     4.50 %     2026       482,133       537,478  
€590.5 million Breakaway three loan (2)     2.98 %     2.98 %     2027       595,494       653,474  
€729.9 million Breakaway four loan (2)     2.98 %     2.98 %     2029       758,595       150,834  
€126 million Norwegian Jewel term loan (2)           1.82 %     2017             7,260  
€126 million Norwegian Jade term loan (2)           1.82 %     2017             7,531  
€666 million Seahawk 1 term loan (2)     3.92 %     3.92 %     2030       184,837       137,514  
€666 million Seahawk 2 term loan (2)     3.92 %     3.92 %     2031       90,351       42,083  
Sirena loan     2.75 %     2.75 %     2019       27,344       40,465  
Explorer newbuild loan     3.43 %     3.43 %     2028       295,093       320,821  
Marina newbuild loan (3)     2.00 %     1.54 %     2023       245,706       290,416  
Riviera newbuild loan (4)     2.11 %     1.81 %     2024       292,183       337,174  
Capital lease and license obligations     Various       Various       2028       45,383       42,702  
Total debt                             6,307,765       6,398,687  
Less: current portion of long-term debt                             (619,373 )     (560,193 )
Total long-term debt                           $ 5,688,392     $ 5,838,494  

 

 

(1) Includes original issue discount of $0.9 million as of December 31, 2017.
(2) Currently U.S. dollar-denominated.
(3) Includes premium of $0.2 million as of December 31, 2017 and 2016.
(4) Includes premium of $0.2 million and $0.3 million as of December 31, 2017 and 2016, respectively.

 

NCLC, a subsidiary of NCLH, entered into a Third Amended and Restated Credit Agreement, dated as of October 10, 2017, with a subsidiary of NCLC, as co-borrower and JPMorgan Chase Bank, N.A. (“JPM”), as administrative agent. This facility revised the $750.0 million senior secured credit facility to, among other things, (a) reprice and increase the existing $750 million revolving credit facility to a new $875 million revolving credit facility (the “New Revolving Loan Facility”), (b) reprice the approximately $1,412 million principal amount outstanding under the existing senior secured term A facility to (the “New Term A Loan Facility”), and (c) add a new $375 million term B loan facility due 2021 (the “New Term B Loan Facility”). The applicable margin under the New Term A Loan Facility and New Revolving Loan Facility is determined by reference to a total leverage ratio, with an applicable margin of between 2.00% and 1.25% with respect to Eurocurrency loans and between 1.00% and 0.25% with respect to base rate loans. The margin for borrowings under the New Term A Loan Facility and New Revolving Loan Facility is 1.75% with respect to Eurocurrency borrowings and 0.75% with respect to base rate borrowings. The applicable margin under the New Term B Loan Facility is 1.75% with respect to Eurocurrency loans and 0.75% with respect to base rate loans. NCLC used proceeds from the New Term B Loan Facility and cash on hand for the Redemption (as defined below).

 

Concurrent with the refinancing of its loan facilities as described above, on October 10, 2017, NCLC completed the redemption of all its outstanding 4.625% Senior Notes due 2020 (“Notes”), at a price including accrued and unpaid interest, of $1,044.41 per $1,000 of outstanding principal amount of Notes so redeemed (the “Redemption”) using the proceeds from the New Term Loan B Facility and cash on hand. No Notes remained outstanding after the redemption.

 

Interest expense, net for the year ended December 31, 2017 was $267.8 million which included $32.5 million of amortization of deferred financing fees and a $23.9 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2016 was $276.9 million which included $34.7 million of amortization of deferred financing fees and a $27.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2015 was $221.9 million which included $36.7 million of amortization of deferred financing fees and a $12.7 million loss on extinguishment of debt.

 

Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio, maintain certain other ratios and restrict our ability to pay dividends. Substantially all of our ships and other property and equipment are pledged as collateral for certain of our debt. We believe we were in compliance with our covenants as of December 31, 2017.

 

The following are scheduled principal repayments on long-term debt including capital lease obligations as of December 31, 2017 for each of the next five years (in thousands):

 

Year   Amount  
2018   $ 619,373  
2019     626,334  
2020     622,129  
2021     2,571,257  
2022     431,674  
Thereafter     1,553,815  
Total   $ 6,424,582  

 

We had an accrued interest liability of $31.9 million and $32.5 million as of December 31, 2017 and 2016, respectively.