Tag Archives: Goldman Sachs

United secures $9.5bn in a double financial deal

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United Airlines has secured $9.5 billion in funding by mortgaging its MileagePlus loyalty programme and securing a $4.5 billion US government-backed loan.

US carrier United announced the twin deals today saying they would extend the company’s liquidity to $17 billion by September.

The $5-billion deal to mortgage United’s MileagePlus programme was secured with investment banks Goldman Sachs, Barclays and Morgan Stanley which will provide a term loan facility – meaning a loan with a specified repayment schedule.

United gave few details other than that the deal should close by the end of July.

The carrier has also secured $4.5 billion in US federal funding under the Coronavirus Aid, Relief, and Economic Security (CARES) Act loans programme.

In a statement, United said: “The company believes it has sufficient slots, gates and routes collateral available to meet the collateral coverage that may be required for the full $4.5 billion available under the loan programme.

“This $9.5 billion of additional liquidity will provide even more flexibility as the airline navigates the most disruptive financial crisis in the history of aviation.”

United reported it had “spent the past several months aggressively and proactively cutting costs”.

This had reduced its average daily ‘cash burn’ to $40 million in the three months to June and would further reduce it to $30 million in the quarter to the end of September.

The cost-cutting measures have included executive pay cuts, a wage and recruitment freeze and unpaid leave.

NCLH Successfully Secures More Than $2 Billion of Additional Liquidity

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Norwegian Escape

Norwegian Cruise Line Holdings Ltd. (NCLH) has successfully secured over $2 billion of additional liquidity so it is “well-positioned” to weather the suspension of operations during the Covid-19 pandemic.

On May 5, the company announced the launch of a series of capital markets transactions, led by Goldman Sachs, to raise approximately $2 billion. The transaction has since been upsized to gross proceeds of $2.225 billion.

The transactions consisted of a $400 million public offering of common equity, $750 million exchangeable senior notes offering, $675 million senior secured notes offering and a $400 million private investment from global consumer-focused private equity firm L Catterton.

Contingent on completion of the transactions, the company said on May 6 that it expects to have approximately $3.5 billion of liquidity. The move came a day after NCLH said there were doubts about its ability as “a going concern.”

“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,” the company said in a news release. “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.”

A financial analyst report by Wedbush concurs. “What seems to be getting missed is that the company now has the cash in place to survive until mid-to-late-2021 even under a worst-case net cash outflow scenario,” the report said. “While we have been relatively bearish with respect to our assumptions as to when the industry is likely to open back up, much less go back to ‘normal’, the liquidity recently added by NCLH would seem to put the company in a sound position under the majority of plausible scenarios, no small feat given the gauntlet that they needed to run through in recent months to ensure the company’s survival.”

NCLH hires Goldman Sachs as financing options are explored

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Goldman Sachs applies for Tokyo banking licence | Financial Times

Norwegian Cruise Line Holdings has reportedly hired experts at investment bank Goldman Sachs to explore financing options on its behalf.

The parent of Norwegian Cruise Line, Regent Seven Seas Cruises and Oceania Cruises has tasked Goldman Sachs will looking into options which could include the sale of a stake in the company, according to a report from Reuters.

It comes amid a global pause on cruise operations due to the coronavirus outbreak.

The report suggests NCLH is considering a stake sale known as private investment in public equity (PIPE), with the company said to be in talks with several private equity firms.

Goldman Sachs declined to comment and the Reuters report said NCLH did not immediately respond to a request for comment.

It comes after Carnival Corporation raised $6.25 billion by issuing new debt and equity to investors. It made a share offering to raise $3 billion and said it would issue $1.75 billion in senior convertible notes. It also commenced an underwritten public offering of $1.25 billion of shares of common stock and underwriters were being given an option purchase of up to $187.5 million additional shares.

NCLH to report first quarter results May 9

Earlier this month it was announced that Saudi Arabia’s sovereign wealth fund had acquired a minority stake in Carnival Corp. The Public Investment Fund based in Riyadh disclosed that it had taken an 8.2% shareholding in the world’s largest cruise company, estimated to be valued at around $370 million.

Royal Caribbean Cruises – parent of Royal Caribbean, Azamara, Celebrity Cruises and Silversea, also announced a $2.2 billion loan last month as it looked to shore up cash flow amid the pandemic.

On April 9, the US Centers for Disease Control and Prevention extended its ‘no sail order’ for all cruise ships for up to 100 days.