Silversea to Sell Bonds

By ,   February 7, 2017 ,   Cruise Industry

Silversea Cruises announced that for the first time in line's history it will sell bonds to the public in order to finance its business. The privately-held ultra-luxury cruise company said it plans to raise USD 550 million in the note offering. This is up from an originally-planned $275 million. The senior secured notes will be due in 2025 and pay interest at a rate of 7.25%.

Silversea announced that proceeds from the offering will be used to refinance or replace existing debt and to finance the purchase of the 596-passenger Silver Muse.

Proceeds will also be used to repurchase the 388-passenger Silver Shadow and to pre-fund capital expenditure requirements, In January 2013, Silver Shadow had been refinanced through China’s ICBC bank and had been owned by Hai Xing 1201 Ltd and leased back to Silversea.

Three weeks ago, on the news of this debt restructuting, Moody’s Investors Service, upgraded Silversea Cruise Finance Ltd senior secured notes rating to B2 from B3. The senior secured notes will no longer be subordinated to the committed ship financing associated with the Silver Muse and will now reflect the preponderance of the capital structure. The new structure will result in only $5 million of incremental debt.