Debt

6 Months Ended

Jun. 30, 2024

Note 6. Debt

Debt consists of the following (in millions):


	Weighted Average Rate (1)	Maturities Through	As of June 30, 2024		As of December 31, 2023
Fixed rate debt:
Unsecured senior notes	6.09%	2026 - 2032	$	7,899	$	7,899
Secured senior notes	8.25%	2029	1,000		1,000
Unsecured term loans	3.26%	2027 - 2036	8,133		6,569
Convertible notes	6.00%	2025	1,150		1,150
Total fixed rate debt			18,182		16,618
Variable rate debt:
Unsecured revolving credit facilities (2)	6.76%	2028	325		899
USD unsecured term loan	6.81%	2024 - 2037	2,574		3,666
Euro unsecured term loan	4.95%	2028	250		443
Total variable rate debt			3,149		5,008
Finance lease liabilities			357		369
Total debt (3)			21,688		21,995
Less: unamortized debt issuance costs			(571)		(543)
Total debt, net of unamortized debt issuance costs			21,117		21,452
Less—current portion			(1,332)		(1,720)
Long-term portion			$	19,785	$	19,732

(1) Weighted average interest rates are based on outstanding loan balance as of June 30, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin.

(2) Advances under our unsecured revolving credit facilities accrue interest at Term SOFR plus a 0.10% credit adjustment spread plus an interest rate margin of 1.33%. Based on applicable Term SOFR rates, as of June 30, 2024, the maximum interest rate under the unsecured credit facilities was 6.77%. We also pay a facility fee of 0.17% of the total commitments under such facility.

(3) At June 30, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.64% and 6.06%, respectively.

Unsecured revolving credit facilities

As of June 30, 2024 our aggregate revolving credit capacity is $3.7 billion of which $1.86 billion of the commitments are scheduled to mature in October 2026 and $1.86 billion of the commitments are scheduled to mature in October 2028. As of June 30, 2024, we had undrawn capacity of $3.4 billion under our unsecured revolving credit facilities.

Debt financing transactions

In March 2024, we issued $1.25 billion of senior unsecured notes (the "notes") due in 2032 for net proceeds of approximately $1.24 billion. Interest accrues on the notes at a fixed rate of 6.25% per annum and is payable semi-annually in arrears. The proceeds from this notes issuance, together with cash on hand, were used to redeem all of the outstanding $1.25 billion aggregate principal amount of 11.625% Senior Notes due 2027. The repayment resulted in a loss on extinguishment of debt of $116 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the six months ended June 30, 2024.

Export credit facilities and agency guarantees

In May 2024, we took delivery of Silver Ray. To finance the delivery, we borrowed a total of $507 million under the committed financing agreement, resulting in an unsecured term loan which is 95% guaranteed by Euler Hermes. The unsecured loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 4.33% per annum.

In June 2024, we took delivery of Utopia of the Seas. To finance the delivery, we borrowed a total of $1.5 billion under the committed financing agreement, resulting in an unsecured term loan which is 100% guaranteed by BpiFrance Assurance Export. The unsecured term loan amortizes semi-annually over 12 years and bears interest primarily at a fixed rate of 3.00% per annum.

During the quarter ended June 30, 2024, we repaid $839 million of outstanding deferred amounts under our export credit facilities. These repayments included both scheduled payments and an early repayment of the amortization deferral obtained on our export credit facilities in 2020 and 2021, which resulted in an immaterial loss on extinguishment of debt that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2024.

Except for the term loan we incurred to acquire 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 June 30, 2024, 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, discounts and premiums 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.

Debt covenants

Our revolving credit facilities, the majority of our term loans, and certain of our credit card processing agreements, contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, limit our net debt-to-capital ratio, maintain minimum liquidity, and under certain facilities, to maintain a minimum level of stockholders' equity. As of June 30, 2024, we were in compliance with our debt covenants and we estimate we will be in compliance for the next twelve months. In July 2024, we amended all of our export credit facilities to remove the stockholders' equity covenant, which has eliminated the contractual requirement for us to maintain a minimum level of stockholders' equity.

The following is a schedule of annual maturities on our total debt, including finance leases, as of June 30, 2024 for each of the next five years (in millions):


Year	As of June 30, 2024 (1)
Remainder of 2024	$	694
2025	2,453
2026	2,949
2027	2,622
2028	3,545
Thereafter	9,425
	$	21,688

(1) Debt denominated in other currencies is calculated based on the applicable exchange rate at June 30, 2024.