MIAMI -- Premier Cruises Ltd. said it completed the sale of a
$160 million high-yield bond issue, which enabled it to pay off
most of its debt and acquire the titles to two of its ships. The
company, which has six vessels in its fleet, already held the
titles to four ships.
The bond offering, at an effective interest of 11.5%, was
purchased by U.S. institutional investors.
"We now have one of the lowest debt-to-cash-flow ratios in the
cruise industry," said Larry Magnan, president and chief executive
officer.
As part of the transaction, Premier received access to new
revolving bank credit, according to Einar Gruner-Hegge, the line's
vice president of finance. Magnan said the transaction left the
line in a position to record "a substantial increase in profits in
1998" -- a preliminary step to making an initial public offer of
its stock. The executive added that the stock offering could be
made this year.
Gruner-Hegge reported that about $130 million of the bond issue
was used to pay off debt and to acquire the Rembrandt, formerly the
Rotterdam, and the IslandBreeze, formerly the Festivale.
The transactions eliminated all but $8.6 million of residual
debt, he said.
As of March 11, Magnan reported that the line's bookings were
ahead of last year's figures, with 98% of its berths sold out for
the first quarter, and 70% for the full year.
Premier will proceed with implementing a unified brand image,
Magnan said, and will enhance the ambience of its classic
vessels.
Cruise Holdings, which owns 100% of Premier, launched the cruise
line after acquiring Premier Cruise Line, Dolphin Cruise Line and
Seawind Cruises.