Star Cruises $600 million loan seen priced at 1% over Libor

Star Cruises has refinanced a $600 million loan, taken out to complete the NCL takeover, and is on track to raise $600 million via a Hong Kong listing in September.

Star Cruises' $600 million five-year loan facility is expected to be priced at the tight end of 1% over Libor, having been oversubscribed 50% at the underwriting stage, according to a banking source. The deal is being coordinated by Barclays Capital Asia and HSBC, and seven other banks have been appointed lead arrangers.

The funds raised will be used to refinance a $600 million bridging loan taken out to finance Star Cruises' $1.9 billion acquisition of Norwegian Cruise Lines (NCL). Star Cruises had originally planned to acquire NCL through a 60/40 joint venture with Carnival Corp, but the latter pulled out of the deal in March, forcing Star Cruises to borrow more than it had originally anticipated. ABN Amro advised Star Cruises on the NCL takeover and arranged the bridging loan but lost out on the refinancing deal after insisting the five-year loan facility be secured on Star Cruises' ships.

The new loan facility should be in place in early-August, paving the way for Star Cruises to raise around $600 million via an equity offering on the Stock Exchange of Hong Kong in September. The company previously said it planned to sell 62 million new shares, equivalent to a 10% stake, when it lists in Hong Kong. Star Cruises shares are currently listed on the Stock Exchange of Singapore and last traded at S$5.20 ($2.99). Parent company Resorts World is listed on the Kuala Lumpur Stock Exchange and last traded at M$10.60 ($2.78).

The seven lead arrangers involved in Star Cruises' refinancing are Credit Agricole Indosuez, KBC Bank, Landesbank Schlewig-Holstein, Standard Chartered Bank, WestLB, The Development Bank of Singapore and The Tokai Bank.

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