Norwegian Cruise Line has taken fresh steps to improve its liquidity position in the wake of the coronavirus pandemic.

The cruise line said it was working with its export credit agencies to finalise an industry wide initiative to grant a 12-month debt holiday to provide interim debt service relief for amortisation payments and financial covenants.

The company has approximately $540 million of ECA-backed amortisation payments due over the next 12-months.

Of this approximately $385 million of payments related to guaranteed financing by Euler Hermes, the official export credit agency of Germany, has already been deferred through April next year.

The company is in the process of finalising the deferral of the remaining approximately $155 million of payments through to March next year with other lenders. 

The company also has the option to extend s $230 million Pride of America term loan by one year to January 2022.

In response to Covid-19, the company secured a new $675 million revolving credit facility on March 5th, and fully drew down on this new facility as well as its existing $875 million revolving credit facility beginning on March 12th, for a total of $1.55 billion.

“Our quick action to proactively and aggressively implement initiatives to preserve cash and enhance liquidity in this uncertain and fluid environment puts us in a stronger position to withstand the adverse financial effects of Covid-19,” said Mark Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings.

“We will not only benefit from the actions taken to strengthen our liquidity profile but will also benefit from a period of reduced capital expenditures with no newbuild deliveries until at least mid-2022. 

“We will continue to evaluate all additional options to enhance liquidity.”

Norwegian Cruise Line also owns and operates the Oceania Cruises and Regent Seven Seas Cruises brands.

All 28 ships under the three flags are currently at anchor, with no sailings planned until June 30th at the earliest.

A no sail order from the United States Centres for Disease Control & Prevention also bars any activity there before July 24th.

“With the Covid-19 pandemic impacting communities worldwide, we continue to closely monitor the evolving global public health environment.

“We have also taken decisive action to protect the company’s future by shoring up our liquidity position through cost mitigation and cash conservation measures as well as pursuing additional sources of liquidity to help us weather this global pandemic,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings.

“We believe the disruption to the travel industry, while swift and severe, will eventually subside.

“Our guests continue to demonstrate their desire for cruise vacations as we continue to experience demand for voyages further in the future across our three brands.

“When the time comes, we will be ready to safely resume operations and welcome our loyal guests on board.”

Prior to the outbreak of Covid-19, Norwegian Cruise Line said it was off to a strong start to 2020, with all three brands entering the year in a record booked position and at higher prices on a comparable basis.

For the first two months of the year, ships sailed full at prices that were higher than prior year despite healthy capacity growth of approximately seven per cent.

However, as of April 17th, advanced bookings for the remainder of 2020 were “meaningfully lower” than the prior year, with pricing down low-single digits.

Booking trends indicate demand for cruise vacations in the medium and longer term with the booked position for 2021 essentially flat compared to prior year at pricing that is down mid-single digits.