Norwegian Cruise Line did not raise equity capital, says BofA

BofA notes that Norwegian Cruise Line (NCLH) recently refinanced $3.4B of total debt in a series of transactions that pushes out maturities to 2030 and beyond from 2026/2027 previously. The “well-timed deal” can save the company about $25M of annualized interest expense while reducing the diluted share count by 38M given the new convert principal can be settled in cash, according to the analyst, who points out that Norwegian “did not raise equity capital.” The company issued a press release saying it priced 3.3M shares at $24.53, but the company did not receive any cash for this and the $81M transaction value was the premium paid to the current convert holders in order to early settle the bonds, BofA stated. The firm, which raised its 2025 and 2026 EPS estimates to $2.11 and $2.70 on lower interest expense and lower diluted share count, keeps a $27 price target and Neutral rating on Norwegian shares.