Norwegian Announces $400 Million Investment by L Catterton

Norwegian Breakaway

Norwegian Cruise Line Holdings announced a private placement of up to $400 million in aggregate principal amount of exchangeable senior notes due 2026 to an affiliate of L Catterton.

“We are pleased to execute this agreement with L Catterton, the largest and most global consumer-focused private equity firm in the world,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. “L Catterton is the ideal partner for our Company as they recognize the remarkable resilience the cruise industry has demonstrated over the past 50 years, appreciate the long-term global demand for cruise vacations, and value our Company’s long track record of growth, execution and success. We look forward to working with their highly experienced team and broad collection of portfolio companies to identify and capture additional value across a range of strategic and operational levers.”

Scott Dahnke, Global co-CEO of L Catterton, said: “The cruise industry has been very resilient over a long period of time, driven by strong secular tailwinds and a high level of guest satisfaction. People enjoy cruising, with many guests taking multiple voyages over time. The industry has overcome numerous challenges in the past, and we expect that the industry will rebound and prosper with even further enhancements to their already rigorous health and safety protocols in place in the future. Within the industry, the three brands of Norwegian Cruise Line Holdings have carved out distinctive leadership positions in their respective markets, guided capably by Frank Del Rio and his exceptional management team. We couldn’t be more excited to support the team at Norwegian as they work through this suspension of travel and begin to commence operations after their voluntary suspension of voyages.”

Material Terms:
• The Private Exchangeable Notes will accrue payment-in-kind interest at a rate of 7.0% per annum for the first year post-issuance, 4.5% per annum payment-in-kind interest plus 3.0% per annum cash interest for the following four years post issuance and 7.5% in cash for the final year prior to maturity;
• L Catterton will be entitled to nominate one member to the Company’s board of directors so long as a minimum ownership threshold is met, as well as one observer to the Company’s board of directors;
• The closing of the Private Exchangeable Notes is expected to occur upon the satisfaction of certain customary closing conditions, including a condition that the Company raises at least $1.0 billion in proceeds (net of underwriting discounts and repaid indebtedness) in the aggregate from other offerings;
• L Catterton will have certain registration rights in respect of the ordinary shares underlying the Private Exchangeable Notes and will be subject to certain customary transfer, voting and standstill restrictions, including a one-year lock-up agreement.

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