S&P Upgrades Norwegian Cruise Line Credit Rating

Norwegian Viva

Norwegian Cruise Line Holdings today announced that S&P Global Ratings (S&P) has recently upgraded NCLC’s (NCL Corporation, a subsidiary of Norwegian Cruise Line Holdings) issuer credit rating and issue-level ratings.

NCLC’s issuer credit rating has been upgraded to B+, marking a notable improvement in the company’s creditworthiness, according to a press release.

In addition, S&P has raised the issue-level ratings on NCLC’s existing secured and unsecured debt. The company’s senior secured debt ratings were raised to BB/BB- and its unsecured debt rating was upgraded two notches to B.

S&P highlighted several factors for the upgrade, including NCLC’s current forward-booked position, increased capacity, occupancy recovery, and higher pricing providing good revenue and cash flow visibility for 2024. In addition, S&P noted that the Company’s leverage will benefit from higher revenue, EBITDA, and cash as it generates a full year of operations from its 2023 ship deliveries, without incurring incremental ship delivery debt in 2024.

Further enhancing its financial position, on March 7, 2024, the company successfully completed the refinancing of its $650 million backstop commitment. This commitment has been refinanced from a secured to an unsecured commitment, and as part of this refinancing, the company has repaid its $250 million 9.75% senior secured notes due 2028, 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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