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Why Norwegian Cruise Line Holdings Ltd. (NCLH) stock is gloomy today?

Shares of the Why Norwegian Cruise Line Holdings Ltd. (NCLH) stock were gloomy in the premarket today on November 26, 2021. NCLH stock price saw a downtrend of 9.41% to drop at $20.50 a share at the time of this writing. The stock was green in the previous trade and went up by 0.31% at closing. Let’s dig in to understand the reason behind this fall.

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What’s Happening?

There is no press release or any announcement by the NCLH stock to justify bearish sentiment. However, Truist Securiti analysts shrank the earnings per share estimate for FY2021 of the NCLH stock. Truist Securiti analyst P. Scholes estimated $7.89 earnings per share of the company this year.

Another major concern is the new Covid variant spotted in South Africa that is menacing to derail the sector’s recovery. Covid-19 already hammered airlines and travel stocks very badly. Now the upcoming few days will further suggest the position of NCLH and related stocks.

Recent Announcement by NCLH stock:

Norwegian stock on November 22, 2021, did announce the closure of a series of related balance sheet and cash flow optimization transactions. The company initiated transactions one week ago before closure. The strategic transactions are beneficial for the Norwegian stock and its shareholders as these lessen annual interest expense, extend the debt maturity of the company, and increase the liquidity of the stock.

Key Elements of Optimization Transactions:

  • NCLH stock issued $1,150 million aggregate principal amount of 2027 Exchangeable Notes.
  • The company repurchased its 6.00% exchangeable senior notes due 2024 for worth $715.9 million.
  • Norwegian stock issued 46,858,854 shares to its existing stockholders of the 2024 Exchangeable Notes for $23.64 per share The net proceeds resulting from this issuance were roughly $1.1 billion.
  • NCLH stock will redeem the aggregate principal amount of $236.25 million of its 12.25% senior secured notes due 2024 by using net proceeds. Part of the proceeds will be used to redeem the $262.50 million aggregate principal amount of its 10.250% senior secured notes due 2026.

Wrap Up:

The management of the Norwegian stock is on a mission to execute its post-crisis financial recovery plan. The completion of optimization transactions is the first step and an important milestone for the NCLH stock to achieve this mission.

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