Company Overview
| Company Name |
NORWEGIAN CRUISE LINE HOLDINGS LTD. |
| Company Address |
7665 CORPORATE DRIVE
MIAMI, FL 33126 |
| Company Phone |
305-436-4000 |
| Company Website |
www.ncl.com |
| CEO |
Kevin M. Sheehan |
| Employees (as of 12/31/2011) |
14072 |
| State of Inc |
-- |
| Fiscal Year End |
12/31 |
| Status |
Priced (1/18/2013) |
| Proposed Symbol |
NCLH |
| Exchange |
Nasdaq National Market |
| Share Price |
$19.00 |
| Shares Offered |
23,529,412 |
| Offer Amount |
$447,058,828.00 |
| Total Expenses |
$7,000,000.00 |
| Shares Over Alloted |
0 |
| Shareholder Shares Offered |
-- |
| Shares Outstanding |
200,468,080 |
| Lockup Period (days) |
180 |
| Lockup Expiration |
7/17/2013 |
| Quiet Period Expiration |
2/27/2013 |
| CIK |
0001513761 |
We will receive net proceeds from the sale of our ordinary shares in this
offering of approximately $414.4 million, after deducting the underwriting
discount and other estimated expenses of approximately $32.7 million. If the
underwriters exercise their option to purchase additional ordinary shares in
full, the net proceeds to us will be approximately $477.6 million.
We intend to use the net proceeds that we receive to (i) prepay an aggregate
total of $55.6 million under our Cash Sweep Credit Facilities that becomes
payable upon an initial public offering consisting of $21.3 million on our
€624.0 million Norwegian Pearl and Norwegian Gem Revolving Credit Facility,
$14.7 million on our €308.1 million Pride of Hawai’i loan, $8.0 million on our
$334.1 million Norwegian Jewel loan, $10.1 million on our €258.0 million Pride
of America loan, and $1.5 million on our €40.0 million Pride of America
commercial loan, (ii) pay Genting HK $79.7 million, together with accrued
interest, that becomes payable pursuant to the Norwegian Sky Agreement upon an
initial public offering and (iii) pay expenses associated with this offering.
We intend to use the balance of the net proceeds that we receive (i) to redeem
up to $122.5 million aggregate principal amount of our $350.0 million Senior
Notes, plus redemption premiums of up to $11.6 million for such senior notes,
(ii) to repay up to $115.0 million aggregate principal amount outstanding under
our $750.0 million Senior Secured Revolving Credit Facility and (iii) for
general corporate purposes to the extent not otherwise applied to debt
repayment. As of September 30, 2012 we did not have an outstanding balance under
our $750.0 million Senior Secured Revolving Credit Facility. Subsequently, there
is an outstanding balance under this facility.
The foregoing represents our current intentions with respect to the use of the
net proceeds of this offering based upon our present plans and business
conditions and other than repayment of our Cash Sweep Credit Facilities, payment
to Genting HK and payment of expenses associated with this offering, as
described above, no specific allocation of the net proceeds has yet been
determined. Our determination of whether to use all or a portion of the net
proceeds to redeem a portion of our $350.0 million Senior Notes will depend on
interest rates and the prices at which our $350.0 million Senior Notes are being
purchased and sold in the market (including relative to the redemption price for
such notes) at or following the consummation of this offering. In addition, the
first optional redemption date under our $450.0 million Senior Secured Notes is
November 15, 2013, and we may call a portion of such notes for redemption at
that time. Our determination of whether to redeem a portion of our $450.0
million Senior Secured Notes will depend on interest rates and the prices at
which our $450.0 million Senior Secured Notes are being purchased and sold in
the market (including relative to the redemption price for such notes) at such
time.
Any net proceeds used to redeem or repay our indebtedness would be first
contributed by the Company to NCL Corporation Ltd. so that NCL Corporation Ltd.
may effect such redemption or repayment. Affiliates of certain of the
underwriters in this offering currently hold or may in the future hold a portion
of the notes that may be redeemed and, accordingly, may receive a portion of the
net proceeds from this offering as a result of the redemption of the notes.
Pending the application of the net proceeds of this offering as described above,
all or a portion of the net proceeds of this offering may be invested by us in
short-term interest-bearing investments.
As of September 30, 2012, there was (i) $350.0 million (which does not include
the unamortized premium of $5.6 million) aggregate principal amount outstanding
of our $350.0 million Senior Notes, which bear interest at a rate of 9.50% per
annum and mature on November 15, 2018 and (ii) $450.0 million (which does not
include the original issue discount of $3.6 million) aggregate principal amount
outstanding of our $450.0 million Senior Secured Notes, which bear interest at a
rate of 11.75% per annum and mature on November 15, 2016. We issued our $250.0
million Senior Notes in November 2010 and our $100.0 million Senior Notes in
February 2012. The net proceeds from the offering of our $350.0 million Senior
Notes were used to repay $147.0 million of certain of our secured term loans,
$198.0 million of our $750.0 million Senior Secured Revolving Credit Facility
and $0.3 million of our capital lease obligations.
As of September 30, 2012, there was $1,104.7 million aggregate principal amount
outstanding under our Cash Sweep Credit Facilities.
A portion of the principal amount of the borrowings under our (i) $334.1 million
Norwegian Jewel loan bear interest at a rate of 6.3575% per annum as of December
31, 2009, and at a rate of 6.8575% per annum thereafter; (ii) €40.0 million
Pride of America commercial loan bear interest at a rate of 6.845% per annum as
of December 31, 2009, and 7.345% per annum thereafter; (iii) €258.0 million
Pride of America loan bear interest at a rate of 5.965% per annum as of December
31, 2009, and 6.465% per annum thereafter; and (iv) €308.1 million Pride of
Hawai’i loan bear interest at a rate per annum equal to LIBOR plus 1.0% as of
December 31, 2009, and LIBOR plus 1.5% thereafter. The interest rate per annum
applied to the remaining portion of the principal amount of our $334.1 million
Norwegian Jewel loan, €40.0 million Pride of America commercial loan, €258.0
million Pride of America loan, and €308.1 million Pride of Hawai’i loan was
LIBOR plus 2.25% as of December 31, 2009; and has been LIBOR plus 2.75%
thereafter. A portion of the borrowings under our €624.0 million Norwegian Pearl
and Norwegian Gem Revolving Credit Facility bear interest at a rate per annum
equal to (i) LIBOR plus (ii) an applicable margin, the maximum of which was
1.49% as of December 31, 2009; is 1.99% from January 2010 until October 2013,
and will be 2.20% thereafter. The maximum applicable margin to be applied to the
other portion of the outstanding principal amount adds 6% to the figures for
each of the aforementioned periods (i.e., 7.49%, 7.99% and 8.20%, respectively).
The applicable margin will decrease by 0.1625% if total funded debt to EBITDA
ratio, as calculated pursuant to the loan agreement, is between 4.0 and 5.0, and
will further decrease by an additional 0.125% if total funded debt to EBITDA
ratio, as calculated pursuant to the loan agreement, is less than 4.0.
The principal amount of borrowings under our $750.0 million Senior Secured
Revolving Credit Facility bear interest at a rate of LIBOR plus 4.00% per annum.
Our $334.1 million Norwegian Jewel loan matures on August 4, 2017; our €40.0
million Pride of America commercial loan and our €258.0 million Pride of America
loan mature on June 6, 2017; our €308.1 million Pride of Hawai’i loan matures on
April 19, 2018; the commitments under Tranche A and Tranche B of our €624.0
million Norwegian Pearl and Norwegian Gem Revolving Credit Facility expire on
November 28, 2018 and October 1, 2019, respectively; and our $750.0 million
Senior Secured Revolving Credit Facility matures on October 28, 2015.
As of September 30, 2012, there was $209.3 (which does not include a $3.5
million fair value discount) million outstanding pursuant to the Norwegian Sky
Agreement, which amount is to be repaid over seven equal semi-annual payments
beginning June 2013 and has a weighted-average interest rate of 1.52% through
maturity.
We compete in the multi-night global cruise vacation industry. Although this
sector has grown significantly over the past decade, it still remains a
relatively small part of the broadly defined global vacation market that has
historically been dominated by land-based vacation alternatives. The different
cruise brands that make up the global cruise vacation industry historically
have been segmented by product offering and service quality into contemporary,
premium and luxury cruises. The contemporary segment generally includes
cruises on larger ships that last seven days or less, provides a casual
ambiance and is less expensive than the premium or luxury segments. The
premium segment generally is characterized by cruises that last from seven to
14 nights with a higher quality product offering than the contemporary
segment, appealing to a more affluent demographic. The luxury segment
generally offers the highest level of services and quality with longer
cruises on the smallest ships. We compete primarily with the other Major
North American Cruise Brands, which together comprise approximately 90% of the
North American cruise market as measured by total Berths. These brands include
Carnival Cruise Lines and Royal Caribbean International which comprise the
contemporary segment and Holland America, Princess Cruises and Celebrity
Cruises which are part of the premium segment. As of September 30, 2012,
Norwegian Cruise Line accounted for approximately 11% of the Major North
American Cruise Brands’ capacity in terms of Berths. We compete against all of
these operators principally on the quality of our ships, our differentiated
product offering, selection of our itineraries and value proposition of our
cruises.
We also face competition from non-cruise vacation alternatives, including
beach resorts, golf and tennis resorts, theme parks, land-based gaming
operations, and other hotels and tourist destinations.
Company Description
We are a leading global cruise line operator, offering cruise experiences for
travelers with a wide variety of itineraries in North America (including Alaska
and Hawaii), the Mediterranean, the Baltic, Central America, Bermuda and the
Caribbean. We strive to offer an innovative and differentiated
cruise vacation
with the goal of providing our customers the highest levels of overall
satisfaction on their cruise experience. In turn, we aim to generate the highest
customer loyalty and greatest numbers of repeat customers. We created a
distinctive style of cruising called “Freestyle Cruising” onboard all of our
ships, which we believe provides our passengers with the freedom and flexibility
associated with a resort style atmosphere and experience as well as more dining
options than a traditional cruise. We established the very first private island
developed by a cruise line in the Bahamas with a diverse offering of activities
for passengers. We are also the only cruise line operator to offer an entirely
inter-island itinerary in Hawaii.
By providing such a distinctive experience and appealing combination of value
and service, we straddle both the contemporary and premium segments. As a
result, we have been recognized for our achievements as the recipient of
multiple honorary awards mainly consisting of reviews tabulated from the readers
of travel periodicals such as Travel Weekly, Condé Nast Traveler, and Travel +
Leisure. We were rated as best for family cruises by Family Circle, recognized
as Europe’s leading cruise line five years in a row by the World Travel Awards
and identified as the cruise line with the best use of a social media platform
by Travel + Leisure. Our newest ship, Norwegian Epic, was recognized as “Best
Overall Individual Cruise Ship” by the Travel Weekly Readers’ Choice Awards.
We offer a wide variety of cruises ranging in length from one day to three
weeks. During 2011, we docked at approximately 100 ports worldwide, with
itineraries originating from 14 ports of which 10 are in North America. In line
with our strategy of innovation, many of these North American ports are part of
our “Homeland Cruising” program in which we have homeports that are close to
major population centers, such as New York, Boston and Miami. This reduces the
need for vacationers to fly to distant ports to embark on a cruise and helps
reduce our guests’ overall vacation cost. We offer a wide selection of exotic
itineraries outside of the traditional cruising markets of the Caribbean and
Mexico; these include cruises in Europe, including the Mediterranean and the
Baltic, Bermuda, Alaska, and the industry’s only entirely inter-island itinerary
in Hawaii with our U.S.-flagged ship, Pride of America. This itinerary is
unparalleled in the cruise industry, as all other vessels from competing cruise
lines are registered outside the U.S. and are required to dock at a distant
foreign port when providing their customers with a Hawaii-based cruise
itinerary.
Each of our 11 modern ships has been purpose-built to consistently deliver our
“Freestyle Cruising” product offering across our entire fleet, which we believe
provides us with a competitive advantage. By focusing on “Freestyle Cruising,”
we have been able to achieve higher onboard spend levels, greater customer
loyalty and the ability to attract a more diverse clientele.
As a result of our strong operating performance over the last four years, the
growing demand we see for our distinctive cruise offering, and the rational
supply outlook for the industry, we believe that it is an optimal time to
add new ships to our fleet. In 2010, we placed an order with Meyer Werft GmbH
of Papenburg, Germany (“Meyer Werft”) for two new cruise ships, Norwegian
Breakaway and Norwegian Getaway, which are scheduled for delivery in April
2013 and January 2014, respectively , in order to continue to grow the
Norwegian brand and drive shareholder value. Most recently, in October 2012,
we reached an agreement with Meyer Werft to build a new cruise ship for
delivery in the fourth quarter of 2015 with an option to build a second ship
with an expected delivery date in spring 2017. Currently referred to as
“Breakaway Plus,” this new ship will be the largest in our fleet and will be
similar in design and innovation to Norwegian Breakaway and Norwegian Getaway.
The contract cost of this ship is approximately €698.4 million, or $898.1
million based on the euro/U.S. dollar exchange rate as of September 30, 2012.
As of September 30, 2012, we have one of the most modern fleets of cruise ships
in the industry among the Major North American Cruise Brands, with a
weighted-average age of 7.9 years. Following the delivery of Norwegian Breakaway
and Norwegian Getaway, which are currently under construction, we will have the
youngest fleet in the cruise industry. These new ships are the next generation
of “Freestyle Cruising” and include some of the most popular elements of our
recently delivered ships together with new and differentiated features.
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We are incorporated under the laws of Bermuda. Our registered offices are
located at Cumberland House, 9th Floor, 1 Victoria Street, Hamilton HM 11,
Bermuda. Our principal executive offices are located at 7665 Corporate Center
Drive, Miami, Florida 33126. Our telephone number is (305) 436-4000. Our
website is www.ncl.com.