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Law360 (May 6, 2020, 8:56 PM EDT) -- Norwegian Cruise Line said Wednesday it raised $2.2 billion in a raft of fundraising transactions steered by Kirkland & Ellis LLP, the day after the cruise company said it had "substantial doubt" about its ability to stay afloat.
Florida-based Norwegian Cruise Line Holdings Ltd. said it experienced "significant oversubscription and demand" for all three of its equity and debt offerings on top of receiving a $400 million private investment from private equity firm L Catterton. The financings brought in more money than the original $2 billion target and could hit $2.4 billion if underwriters fully exercise their overallotment options, the cruise company said.
With the latest funds, Norwegian said it expects to have about $3.5 billion in cash. That should be enough to last if its ships are docked for a year, the announcement said.
"This significantly strengthens the company's financial position and liquidity runway and it now expects to be positioned to withstand well over 12 months of voyage suspensions in a potential downside scenario," Norwegian said in an announcement. "When the transactions are completed, the additional liquidity alleviates management's concern about the company's ability to continue as a going concern for the next 12 months."
Norwegian previously suspended trips on its 28 cruise ships from March 13 until at least June 30, and the U.S. Centers for Disease Control and Prevention on March 14 issued a no-sail order to limit the spread of COVID-19 through cruise ships.
The latest financings include a $400 million sale of common stock in which Norwegian offered over 36 million ordinary shares, according to a Wednesday filing with the U.S. Securities and Exchange Commission. Norwegian's subsidiary, NCL Corp. Ltd., conducted a $750 million private offering of exchangeable senior notes and a $675 million private offering of senior secured notes, the filing said.
NCL Corp. also entered the investment agreement with L Catterton, in which an L Catterton affiliate bought $400 million in senior notes, according to the filing.
The exchangeable senior notes can ultimately be swapped out for ordinary shares, while the senior secured notes are backed by assets such as Norwegian's intellectual property, two ships and two islands it uses for its cruises, according to Norwegian's Tuesday disclosures about the transactions.
Norwegian isn't the first cruise line to seek funds from investors during the crisis. In early April, Carnival Corp. said it planned to raise about $6 billion through a series of stock and notes offerings.
In addition to the financial hurdles, Norwegian also faces legal claims stemming from its response to COVID-19. The company is facing a probe by the Florida attorney general and at least two proposed securities class actions from investors over the cruise line's handling of the virus.
A representative for Norwegian did not immediately respond to a request for comment on Wednesday.
Norwegian is represented by a Kirkland & Ellis LLP team including corporate partners Sophia Hudson, Eric Schiele and Jonathan Davis and associate Zoey Hitzert; debt finance partners Melissa Hutson and Kirsten Derhaag; and corporate partner Maggie Flores.
The underwriters for the stock offering are Goldman Sachs & Co. LLC, Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Credit Agricole Securities (USA) Inc. and UBS Securities LLC.
The underwriters are represented by a Davis Polk & Wardwell LLP team including partners John Meade and John Brandow and counsel Faisal Baloch, Jeff Ramsay and Mayer Steinman.
L Catterton is represented by a Gibson Dunn & Crutcher LLP team including Steven R. Shoemate, Eric Scarazzo, Robert Banerjea, Aaron F. Adams, Fred N. David, Eric B. Sloan and Kathryn A. Kelly.
--Additional reporting by McCord Pagan, Nathan Hale and Emilie Ruscoe. Editing by Alanna Weissman.
Update: this story has been updated with additional counsel information.
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