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Debt
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Debt
Note 7. Debt
Debt consists of the following (in thousands):
Interest Rate (1)
Maturities ThroughAs of September 30, 2022As of December 31, 2021
Fixed rate debt:
Unsecured senior notes
3.70% to 11.63%
2023 - 2028$7,199,316 $5,604,498 
Secured senior notes
10.88% to 11.50%
2023 - 20252,364,360 2,354,037 
Unsecured term loans
1.28% to 5.89%
2026 - 20344,598,946 2,860,567 
Convertible notes
2.88% to 6.00%
2023 - 20251,725,000 1,558,780 
Total fixed rate debt15,887,622 12,377,882 
Variable rate debt:
Unsecured revolving credit facilities (2)
4.44% to 4.84%
2022 - 20242,329,342 2,899,342 
USD unsecured term loan
4.63% to 8.25%
2022 - 20374,608,777 5,018,740 
Euro unsecured term loan
2.26% to 6.01%
2022 - 2028540,885 685,633 
Total variable rate debt7,479,004 8,603,715 
Finance lease liabilities402,227 472,275 
Total debt (3)
23,768,853 21,453,872 
Less: unamortized debt issuance costs(439,482)(363,532)
Total debt, net of unamortized debt issuance costs23,329,371 21,090,340 
Less—current portion (3,945,145)(2,243,131)
Long-term portion$19,384,226 $18,847,209 
(1) Interest rates based on outstanding loan balance as of September 30, 2022 and, for variable rate debt, include either LIBOR, EURIBOR or Term SOFR plus the applicable margin.
(2) Includes $1.9 billion facility and $1.3 billion facility, the vast majority of which is due in 2024. Our $1.9 billion facility accrues interest at LIBOR plus a maximum interest rate margin of 1.30% which interest was 4.44% as of September 30, 2022 and is subject to a facility fee of a maximum of 0.20%. Our $1.3 billion facility accrues interest at LIBOR plus a maximum interest rate margin of 1.70%, which interest was 4.84% as of September 30, 2022 and is subject to a facility fee of a maximum of 0.30%.
(3) At September 30, 2022 and December 31, 2021, the weighted average interest rate for total debt was 7.19% and 5.47%, respectively.
In January 2022, we took delivery of Wonder of the Seas. To finance the delivery, we borrowed a total of $1.3 billion under a credit agreement novated to us upon delivery of the ship in January 2022, resulting in an unsecured term loan which is 100% guaranteed by Bpifrance Assurance Export ("BpiFAE"), the official export credit agency ("ECA") of France. The unsecured loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.18% per annum.
In January 2022, we issued $1.0 billion of senior notes (the "January 2022 Unsecured Notes") due in 2027 for net proceeds of approximately $990.0 million. Interest accrues on the January 2022 Unsecured Notes at a fixed rate of 5.375% per annum and is payable semi-annually in arrears. The proceeds from the January 2022 Unsecured Notes are being used to repay principal payments on debt maturing in 2022 (including to pay fees and expenses in connection with such repayments).
In February 2022 we entered into certain agreements with Morgan Stanley & Co., LLC (“MS”) where MS agreed to provide backstop committed financing to refinance, repurchase and/or repay in whole or in part our existing and outstanding 10.875% Senior Secured Notes due 2023, 9.125% Senior Priority Guaranteed Notes due 2023 (the "Priority Guaranteed Notes"), and 4.25% Convertible Notes due June 2023. Pursuant to the agreements, we are able, at our sole option, to issue and sell to MS (subject to the satisfaction of certain conditions) five-year senior unsecured notes with gross proceeds of up to $3.15 billion at any time between April 1, 2023 and June 29, 2023. As of September 30, 2022, the $3.15 billion was reduced to $2.35 billion after the repurchase of an aggregate principal amount of $800 million of the June 2023 Convertible Notes with the proceeds of the 2025 Convertible Notes, as described below. Additionally, in October 2022, we completed the offering of the
8.25% senior secured notes due 2029 and 9.25% senior guaranteed notes due 2029, as a result of which the amount available under the MS backstop facility was reduced to $350 million. The MS backstop facility will continue to be available to refinance the remaining $350 million due under the 4.25% Convertible Notes due June 2023.
In April 2022, we took delivery of Celebrity Beyond. To finance the delivery, we borrowed a total of €0.7 billion under a credit agreement novated to us upon delivery of the ship in April 2022, resulting in an unsecured term loan which is 100% guaranteed by BpiFAE. The unsecured loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 1.28% per annum.
In July 2022, we purchased a ship for our Silversea Cruises brand. To finance the purchase, we assumed $277 million of debt, which is 95% guaranteed by Euler Hermes Aktiengesellschaft (“Hermes”), the official export credit agency of Germany. The loan amortizes semi-annually over 13 years starting in July 2024 and bears interest at a floating rate equal to SOFR plus a margin of 1.25%. The loan will mature in July 2037.
In August 2022, we issued $1.15 billion of convertible senior notes which accrue interest at 6.00% and mature in August 2025. Upon conversion election, we may deliver shares of our common stock, cash, or a combination of common stock and cash, at our election. The initial conversion rate per $1,000 principal amount of the convertible notes is 19.9577 shares of our common stock, which is equivalent to an initial conversion price of approximately $50.11 per share, subject to adjustment in certain circumstances. Prior to May 15, 2025, the convertible notes will be convertible at the option of holders during certain periods, and only under the following circumstances:
•during any calendar quarter commencing after the calendar quarter ending on or after September 30, 2022 (and only during such calendar quarter), if the last reported sale price per share of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
•the trading price per $1,000 principal amount of notes is less than 98% of the product of the last reported sale price per share of our common stock and the conversation rate for ten consecutive trading days (in which case the notes are convertible at any time during the five business day period following the 10 consecutive trading day period);
•if we call the notes for a tax redemption; or
•upon the occurrence of specified corporate events.
On or after May 15, 2025 the convertible notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding their maturity date. We received gross proceeds from the offering of $1.15 billion, which we used to repurchase $800 million aggregate principal amount of our 4.25% convertible senior notes due June 15, 2023 and $350 million aggregate principal amount of our 2.875% convertible senior notes due November 15, 2023 (the "Existing Convertible Notes") in privately negotiated transactions. The $1.15 billion repayment resulted in a total loss on the extinguishment of debt of $12.8 million, which was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive loss for the quarter and nine months ended September 30,2022.
In August 2022, we issued $1.25 billion of senior unsecured notes which accrue interest at 11.625% and mature in August 2027. The net proceeds of the offering of $1.23 billion were first used to temporarily repay borrowings under our revolving credit facilities. The proceeds were subsequently used to repay other debt scheduled to mature in 2022, including the $650 million 5.25% unsecured senior notes due November 2022, which resulted in a loss on extinguishment of debt of $3.62 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive loss for the quarter and nine months ended September 30, 2022.
In August 2022, we extended our binding commitment for a $700.0 million term loan facility by one year. As amended, we may draw on the facility at any time prior to August 11, 2023. Once drawn, the loan will bear interest at SOFR plus a margin of 5.75% and will mature 364 days from funding. In addition, the facility (if drawn) will be guaranteed by RCI Holdings LLC, our wholly owned subsidiary that owns the equity interests in subsidiaries that own seven of our vessels. We have the ability to increase the capacity of the facility by an additional $300.0 million from time to time subject to the receipt of additional or increased commitments and the issuance of guarantees from additional subsidiaries.
In September 2022, we amended our $0.6 billion unsecured term loan due October 2023. The amendments, among other things, extend the maturity date of advances under the facilities held by consenting lenders by 12 months to October 2024. Consenting lenders received a prepayment equal to 10% of their respective outstanding advances. Following this amendment, the aggregate outstanding principal balance of advances under the unsecured term loan is $501.6 million, with $30.0 million maturing in October 2023 and $471.6 million maturing in October 2024.
In October 2022, we issued $1.0 billion aggregate principal amount of 9.250% senior guaranteed notes due 2029 and $1.0 billion aggregate principal amount of 8.250% senior secured notes due 2029, both callable in April 2025. We used the combined net proceeds, of the respective offerings, together with cash on hand, to fund the redemption, including call premiums, fees and expenses, of our outstanding 9.125% senior guaranteed notes due 2023 and 10.875% senior secured notes due 2023.
Our export credit facilities and our non-export credit facilities have an outstanding principal amount of approximately $12.0 billion as of September 30, 2022. These facilities contain covenants that require us, among other things, to maintain a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio, and under certain facilities, to maintain a minimum shareholders' equity. In 2021, we amended our non-export credit facilities and export credit facilities, and certain credit card processing agreements, to extend the waiver of our financial covenants through and including at least the third quarter of 2022, and subsequently in the third quarter of 2021, we entered into a letter agreement to extend the waiver period for our export credit facilities to the end of the fourth quarter of 2022. Further, in July 2022, we amended our non-export-credit facilities and export credit facilities, and certain credit card processing agreements. Among other things, the amendments modified the levels at which our net debt to capitalization covenant will be tested during the period commencing immediately following the end of the waiver period and continuing through the end of 2025 and the amount of minimum shareholders' equity required to be maintained through 2025. The amendments impose a monthly-tested minimum liquidity covenant of $350.0 million, which in the case of the non-export credit facilities terminates at the end of the waiver period and in the case of the export credit facilities terminates either in July 2025, or when we pay off all deferred amounts, whichever is earlier. In addition, the amendments to the non-export credit facilities place restrictions on paying cash dividends and effectuating share repurchases through the end of the third quarter of 2022, while the export credit facility amendments require us to prepay any deferred amounts if we elect to issue dividends or complete share repurchases.
As of September 30, 2022, our aggregate revolving borrowing capacity was $3.2 billion and was utilized through a combination of amounts drawn and letters of credits issued under the facilities. As of September 30, 2022, $0.8 billion remained undrawn. Certain of our surety agreements with third party providers for the benefit of certain agencies and associations that provide travel related bonds, allow the sureties to request collateral. We also have agreements with our credit card processors relating to customer deposits received by us for future voyages. These agreements allow the credit card processors to require us, under certain circumstances, to maintain a reserve that can be satisfied by posting collateral. As of September 30, 2022, we have posted letters of credit as collateral with our sureties under our revolving credit facilities in the amount of $14.2 million.
Executed amendments are in place for the majority of our credit card processors, waiving reserve requirements tied to the breach of our financial covenants through at least September 30, 2022, with modified covenants thereafter, and as such, we do not anticipate any incremental collateral requirements for the processors covered by these waivers in the next 12 months. We have a reserve with a processor where the agreement was amended in the first quarter of 2021, such that proceeds are withheld in reserve, until the sailing takes place or the funds are refunded to the customer. The agreement with this processor was further amended in the third quarter of 2021 such that a portion of the proceeds are withheld in reserve. The maximum projected exposure with the processor, including amounts currently withheld and reported in Trade and other receivables, is approximately $244.5 million. The amount and timing are dependent on future factors that are uncertain, such as the value of future deposits and any decisions about transferring business to other processors. If we require additional waivers on the credit card processing agreements and are not able to obtain them, this could lead to the termination of these agreements or the trigger of reserve requirements.
Except for the term loans we incurred to acquire Celebrity Flora and Silver Moon, all of our unsecured ship financing term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed. For the majority of the loans as of September 30, 2022, we pay to the applicable export credit agency, depending on the financing agreement, an upfront fee of 2.35% to 5.48% of the maximum loan amount in consideration for these guarantees. We amortize the fees that are paid upfront over the life of the loan. We classify these fees within Amortization of debt issuance costs in our consolidated statements of cash flows. Prior to the loan being drawn, we present these fees within Other assets in our consolidated balance sheets. Once the loan is drawn, such fees are classified as a discount to the related loan, or contra-liability account, within Current portion of long-term debt or long-term debt.
The following is a schedule of annual maturities on our total debt, net of debt issuance costs of $439.5 million, and including finance leases, as of September 30, 2022 for each of the next five years (in thousands):
YearAs of September 30, 2022 (1)
Remainder of 2022589,222 
2023 (2) 4,062,005 
20244,063,513 
20253,617,022 
20262,706,650 
Thereafter8,290,959 
23,329,371 
(1)    Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2022.
(2)    In October 2022, we issued $2.0 billion of aggregate principal notes due 2029, the proceeds of which were used to repay $2.0 billion of 2023 debt maturities.