Snubbed by EXIM, Cruise Lines Get ECA Relief From Europe

(Bloomberg, Miami, 24 April 2020) After missing out on U.S. emergency aid, Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd. are benefiting from a debt-holiday initiative by Germany’s export credit agency, Euler Hermes Aktiengesellschaft. The coronavirus pandemic has hammered the cruise industry, which shuttered operations in mid-March after a series of outbreaks at sea. The companies have been raising money and cutting expenses to weather a period without customers. The biggest companies were left out of the U.S. rescue package because they aren’t incorporated stateside. Most of the cruise industry is incorporated in places where companies can avoid U.S. income taxes and minimum wage requirements. Norwegian said the 12-month debt holiday -- which applies to debt used to finance ships -- will provide about $386 million in additional liquidity through April 2021. Royal Caribbean said it will add $250 million through debt holiday agreements with Euler. In addition, the national governments of France, Finland, Italy, Norway and Germany have agreed that cruise shipping companies could apply to suspend the repayment of their debts financed by state export credit guarantees for one year.