NCL Bankruptcy Would Help Carnival Brands

[jimmieg]

2 hours ago, PrincessLuver said:

 

Evidently NCL is not going bankrupt because they just announced that they raised over $2 Billion USD after their announcement yesterday and can sustain themselves for possibility a year.https://www.cnbc.com/2020/05/06/norwegian-cruise-line-raises-over-2-billion-to-withstand-well-over-a-year-without-revenue.html

Sure they paid a premium for financing, but it is encouraging to know there are still investors who think cruise lines will make it.

Closer than we were yesterday to being on the high seas.

Edited May 6, 2020 by jimmieg

[cruzsnooze]

1 minute ago, jimmieg said:

Sure they paid a premium for financing, but it is encouraging to know there are still investors who think cruise lines will make it.

Closer than we were yesterday to bring on the high seas.

I've got my fingers crossed and over $12,000 in FCC with Princess. 

[travelhound]

6 hours ago, PrincessLuver said:

 

Evidently NCL is not going bankrupt because they just announced that they raised over $2 Billion USD after their announcement yesterday and can sustain themselves for possibility a year.https://www.cnbc.com/2020/05/06/norwegian-cruise-line-raises-over-2-billion-to-withstand-well-over-a-year-without-revenue.html

Well maybe there is some hope for NCL

[icat2000]

On 5/6/2020 at 2:28 AM, cruzsnooze said:

If NCL goes bankrupt their passenger base would have to move to another mass market cruise line for those that wish to cruise. Carnival's brands and RCL's brands would seem the likely choices. The cruise industry has too many berths already so this will cull the herd and subsequently raise prices when things get back to a more normal time. 

 

https://www.cnbc.com/2020/05/05/norwegian-cruise-line-says-theres-substantial-doubt-about-its-ability-to-continue-as-a-going-concern.html

I would hope not. People lose jobs. Passengers will have little hope at getting their money back as they become bottom of the food chain as unsecured creditors. 

[Hlitner]

8 hours ago, jimmieg said:

Sure they paid a premium for financing, but it is encouraging to know there are still investors who think cruise lines will make it.

Closer than we were yesterday to being on the high seas.

CCL paid an even bigger premium (including issuing bonds paying over 11% interest and some generous convertible bonds) to get their financing.  CCL has been burning through nearly $1 Billion a month in cash.  At this point anything is possible including the bankruptcy of any of the major cruise corporations.

 

Hank

[Janet76]

Given the fact that pretty much all of 2020 season is wiped out and bookings for next year is mostly from FCC, all cruise industry is in the brink of collapse.  We are still waiting for our refund but we are loosing faith each day. We were told 90 days now up to 180 days.  So, are we the customers last to be covered after debt payoffs and CEO compensation.  Please do not tell us to be understanding.  We have been more than patient.   

[jimmieg]

2 hours ago, Hlitner said:

CCL paid an even bigger premium (including issuing bonds paying over 11% interest and some generous convertible bonds) to get their financing.  CCL has been burning through nearly $1 Billion a month in cash.  At this point anything is possible including the bankruptcy of any of the major cruise corporations.

 

Hank

Do not know the terms of the NCL infusion. Words is they carry the most debt of three majors

While it is shaky for all, imagine terms of some current debt will be renegotiated as I do not think banks/investment firms want to own cruise ships.

 

[jimmieg]

2 hours ago, Janet76 said:

Given the fact that pretty much all of 2020 season is wiped out and bookings for next year is mostly from FCC, all cruise industry is in the brink of collapse.  We are still waiting for our refund but we are loosing faith each day. We were told 90 days now up to 180 days.  So, are we the customers last to be covered after debt payoffs and CEO compensation.  Please do not tell us to be understanding.  We have been more than patient.   

FWIW - I find this a better way to look at the refund I also am waiting for:

It was money set aside for a special cruising experience. If I don't get it back, I am no worse off financially, but I will have lost the experience.

Others - crew members who serve us so well- who have much less than you or me have lost months of the ability to support their families.

All my fretting will not get a dollar back a day sooner.

[latebloomer56]

On 5/5/2020 at 2:00 PM, franktown said:

NCL attracts very different cruisers then Princess.  Much more like RCL.  Princess ships do not offer the same amenities that NCL now offers.  We cruise on NCL when we take the teen grandkids.  Princess when its a adult cruise.

Same with us NCL is a home port line for us we love Princess though and have sailed 22 times all over the world on Princess. We are booked for a family trip with NCL (no flying) next May 2021 so hope they work things out.

[AF-1]

 let's keep up the faith.  The cruise lines will hopefully come back next year;  they may be leaner; but they will come back with a game plan to operate in a much more efficient and safe way.   Cheers

[Hlitner]

5 hours ago, jimmieg said:

Do not know the terms of the NCL infusion. Words is they carry the most debt of three majors

While it is shaky for all, imagine terms of some current debt will be renegotiated as I do not think banks/investment firms want to own cruise ships.

 

No, I have not seen anything with the actual details although there were rumors about some kind of stock deal.  To be honest, I thought NCL was toast and was surprised they were able to get the needed cash.

 

Hank

[AF-1]

Norwegian Cruise Line Holdings, the world’s third-largest cruise company, has reportedly hired investment bank Goldman Sachs to help shore up its finances as it deals with the cruise industry’s standstill amidst the coronavirus crisis.

[Hlitner]

I just did some digging and come up with this report on the details. 

https://www.fool.com/investing/2020/05/06/at-least-one-private-equity-firm-believes-norwegia.aspx

 

It appears that part of this deal involved convertible bonds/debt which is similar to how CCL raised some of its Billions.  Convertible bonds can have a long range devastating impact on the stock price.

 

Hank

[susancruzs]

CNBC's Jim Cramer is going to have NCL on his Mad Money show tonight.  I don't usually watch but I will tonight to hear what they are saying.  The money being borrowed is mind boggling really.

[travelhound]

1 hour ago, susancruzs said:

CNBC's Jim Cramer is going to have NCL on his Mad Money show tonight.  I don't usually watch but I will tonight to hear what they are saying.  The money being borrowed is mind boggling really.

Yup, I just heard that this morning.  It will be interesting to hear what their plans are for resuming operations.

[PrincessLuver]

1 hour ago, susancruzs said:

CNBC's Jim Cramer is going to have NCL on his Mad Money show tonight.  I don't usually watch but I will tonight to hear what they are saying.  The money being borrowed is mind boggling really.

 

Thanks for the heads - up!!

[npcl]

12 hours ago, Hlitner said:

CCL paid an even bigger premium (including issuing bonds paying over 11% interest and some generous convertible bonds) to get their financing.  CCL has been burning through nearly $1 Billion a month in cash.  At this point anything is possible including the bankruptcy of any of the major cruise corporations.

 

Hank

CCL's bonds were 11.5% face value, sold at a slight discount making 12% actual rate, NCLH bond had face value of 12.25% for the secured bonds.  The rest were convertible bonds that can be converted to stock.  NCLH did get a higher stock price.  But all in all very Basically when all is considered the NCLH shareholders just got diluted around 50% if all of the convertible shares convert.

[Hlitner]

17 minutes ago, npcl said:

CCL's bonds were 11.5% face value, sold at a slight discount making 12% actual rate, NCLH bond had face value of 12.25% for the secured bonds.  The rest were convertible bonds that can be converted to stock.  NCLH did get a higher stock price.  But all in all very Basically when all is considered the NCLH shareholders just got diluted around 50% if all of the convertible shares convert.

Almost sounds like a fire sale :(.  Even if these cruise companies survive they are going to have to deal with a large debt service, diluted stock, a huge accounts payable related to Future Cruise Credits (which is a liability), possible future problems with ports, the inability to implement any meaningful social distancing on ships, etc.  It sounds bleak.  And yet, there are some pretty savvy investors (like the Saudis) willing to gamble on the industry. 

 

We continue to be intrigued by MSC who might actually come out of all this in better shape then any of the competition.  It is impossible to know their actual financial situation given that it's still a privately held company.

 

Hank

[muffydawg]

Hubby and I do not subscribe to the social media , TV media driven mass hysteria so prevalent these days. We do not cheerlead for "if one business fails it can help another" hypotheticals. We are booked on another Princess cruise. We are traveling within Florida. We will travel out of state over upcoming holiday weekends and throughout the summer. We look forward to booking a 2021 Med cruise on Princess.