Note 6 - Long-term Debt

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 6 — LONG-TERM DEBT

Credit Facility

On March 27, 2018, the Company entered into the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) providing for a refinancing and amendment of the terms of the Company’s prior secured credit facility. The Amended Credit Agreement provided for a $200.0 million senior secured term facility (the “Term Facility”), maturing March 27, 2025, and a $45.0 million senior secured incremental revolving credit facility (the “Revolving Facility”), which includes a $5.0 million letter of credit sub-facility. In connection with the Amended Credit Agreement, the Company capitalized $4.2 million related to lender and third-party fees. The Company’s obligations under the Amended Credit Agreement remain secured by substantially all of the assets of the Company. During March 2020, the Company drew down the entire Revolving Facility, which matures in March 2023, and $44.5 million is outstanding as of December 31, 2021.

On August 7, 2020, the Company amended its Term Facility and Revolving Facility to waive the application of the total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the term loan has been increased 125 basis points, to be paid-in-kind at maturity, a LIBOR minimum of 0.75% was added to the term loan and revolving credit facilities and certain covenants were amended to be more restrictive.

On December 10, 2020, the Company amended its Term Facility and Revolving Facility to provide for the borrowing of a new tranche of incremental term loans under the Amended Credit Agreement in an amount of $85.0 million, maturing on December 11, 2025, made under the Main Street Expanded Loan Facility (the “Main Street Loan”). Interest on the Main Street Loan shall be paid-in-kind for the first year and the principal shall amortize at a rate of 15% in each of the third and fourth years, with the remaining amounts to be paid at maturity. The Company may voluntarily prepay the Main Street Loan at any time and from time to time, without premium or penalty, other than customary “breakage costs” and fees for LIBOR-based loans.

During April 2021, the Company further amended its Amended Credit Agreement to, among other things, extend the waiver of its total net leverage ratio covenant through March 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the Term Facility, excluding the Main Street Loan Facility, and the Revolving Facility by 50 basis points. Certain other covenants under the Amended Credit Agreement continue to be more restrictive during the extended covenant waiver period. Borrowings under the Term Facility, as amended, bear interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR, with a minimum of 0.75%, plus a spread of 5.25%, for an aggregated rate of 6.00% as of December 31, 2021. The Main Street Loan shall bear interest at a rate per annum of LIBOR for an interest period of 3-months plus 3.00%, for an aggregated rate of 3.21% as of December 31, 2021. Borrowings under the Revolving Facility mature March 2023 and, as amended, bear interest at an adjusted ICE Benchmark administration LIBOR, plus a spread of 3.50%, for an aggregated rate of 3.60% as of December 31, 2021.

The Amended Credit Agreement contains financial covenants that, among other things, (i) require the Company to maintain a total net leverage ratio (defined as on any date of determination, the ratio of total debt on such date, less up to $50.0 million of the unrestricted cash and cash equivalents to Adjusted EBITDA, as defined in the Amended Credit Agreement, for the trailing 12-month period of 5.0 to 1.0 initially, with 0.25 equal reductions every two years thereafter until June 30, 2022 when the total net leverage ratio shall be 4.75 to 1.00 thereafter; (ii) limit the amount of indebtedness the Company may incur generally and specifically for intercompany debt, debt incurred to finance acquisitions and improvements, for capital and synthetic lease obligations, for standby letters of credit, and in connection with refinancing; (iii) limit the amount the Company may spend in connection with certain types of investments; and (iv) require the delivery of certain periodic financial statements and an operating budget. The net leverage ratios covenant of the Company’s Amended Credit Agreement has been waived through March 2022. As of December 31, 2021, the Company was in compliance with the covenants currently in effect.

Senior Secured Credit Agreements

On January 8, 2018, the Company entered into a senior secured credit agreement (the “First Export Credit Agreement”) with Citibank, N.A., London Branch (“Citi”) and Eksportkreditt Norge AS, (together with Garantiinstituttet, now known as Eksfin, Export Finance Norway), (together with Citi, the “Lenders”). Pursuant to the First Export Credit Agreement, in March 2020 the Company borrowed $107.7 million for the purpose of providing financing for up to 80% of the purchase price of the Company’s new expedition ice-class cruise vessel, the National Geographic Endurance, delivered in March 2020. Seventy percent of the loan is guaranteed by Eksfin, the official export credit agency of Norway. The Company incurred approximately $2.4 million in financing fees related to the First Export Agreement, recorded as deferred financing costs as part of long-term debt. In June 2020, the Company amended its First Export Credit Agreement to defer scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021. During June 2021, the Company further amended its First Export Credit Agreement to, among other things, extend the deferral of scheduled amortization payments through December 2021 in the aggregate amount of $15.7 million, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.The loan amortizes quarterly based on a twelve-year profile, with 70% maturing over twelve years from drawdown, and 30% maturing over five years from drawdown. The loan is secured by a first priority mortgage over the National Geographic Endurance and the assignment of related insurances. The First Export Credit Agreement also contains customary events of default and mandatory prepayment events for, among other things, non-payment, breach of covenants, default on certain other indebtedness, certain large judgments and a change of control of the Company. In addition to paying interest on any outstanding loans under the facility, the Company is required to pay customary coordination, arrangement, agency, collateral and commitment fees. Amounts drawn under the First Export Credit Agreement may be voluntarily prepaid at any time subject to customary breakage costs. The First Export Credit Agreement bears interest at a floating interest rate equal to three-month LIBOR plus a margin of 3.50% per annum, for an aggregated rate of 3.70% over the borrowing period covering December 31, 2021.

On April 8, 2019, the Company entered into a senior secured credit agreement (the “Second Export Credit Agreement”) with the Lenders. Pursuant to the Second Export Credit Agreement, the Lenders made available to the Company, at the Company's option and subject to certain conditions, a loan in an aggregate principal amount of $122.8 million for the purpose of providing pre- and post-delivery financing for up to 80% of the purchase price of the Company’s new expedition ice-class cruise vessel, the National Geographic Resolution, delivered during September 2021. The Company borrowed a total of $122.8 million under the Second Export Credit Agreement, drawing approximately $30.5 million in 2019, $30.6 million in 2020 and $61.7 million in 2021. In June 2020, the Company amended its Second Export Credit Agreement to suspend the total net leverage ratio covenant from June 2020 through June 2021. During June 2021, the Company further amended its Second Export Credit Agreement to, among

other things, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022. The loan amortizes quarterly based on a twelve-year profile, with 70% maturing over twelve years from final drawdown, and 30% maturing over five years from final drawdown. Additionally, 70% percent of the loan is guaranteed by Eksfin, the official export credit agency of Norway. The Company incurred approximately $2.6 million in financing fees related to the Second Export Agreement, recorded as deferred financing costs as part of long-term debt. The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three-month LIBOR plus a margin of 3.50% per annum, or 3.71% over the borrowing period covering December 31, 2021.

The First Export Credit Agreement and the Second Export Credit Agreement contain financial covenants that, among other things, require us to maintain a total net leverage ratio of 5.25 to 1.00 initially, with 0.25 equal reductions every two years thereafter until June 30, 2022 when the total net leverage ratio shall be 4.75 to 1.00, thereafter. The total net leverage ratio is defined under the covenants as on any date of determination, the ratio of total debt on such date, less up to $50.0 million of the unrestricted cash and cash equivalents to Adjusted EBITDA, as defined in the First Export Credit Agreement and the Second Export Credit Agreement, for the trailing 12-month period. The net leverage ratio covenants of the Company’s First Export Credit Agreement and the Second Export Credit Agreement have been suspended through March 2022. As of December 31, 2021, the Company was in compliance with the covenants currently in effect.

Note Payable

In connection with the Natural Habitat acquisition in May 2016, Natural Habitat issued an unsecured promissory note to Benjamin L. Bressler, the founder of Natural Habitat, with an original principal amount of $2.5 million. The promissory note accrues interest at a rate of 1.44% annually, with interest payable every six months. On May 1, 2020, the promissory note was amended, changing the maturity date of the principal payments to be due in three equal installments with the first payment paid December 22, 2020, the second paid December 22, 2021 and the final payment due on December 22, 2022.  

Other

The Company’s Off the Beaten Path subsidiary has a loan maturing June 2023 for the purchase of guest transportation vehicles. The loan’s original principal was $0.3 million, is collateralized by the vehicles and bears interest of 4.77% as of December 31, 2021.

The Company’s Off the Beaten Path subsidiary has a $0.8 million loan under the Main Street Expanded Loan Facility, originated on December 11, 2020. For the first 12 months, interest is not payable and accrued to the principal balance, thereafter, monthly interest payments are required. The outstanding balance will amortize at a rate of 15% on both December 2023 and December 2024, with the remaining balance due December 2025. The loan bears a variable interest rate equal to one-month LIBOR plus a spread of 3.00%, or 3.21% as of December 31, 2021. This loan may be voluntarily prepaid at any time and from time to time, without premium or penalty, other than customary “breakage costs” and fees for LIBOR-based loans.

The Company’s DuVine subsidiary has a EUR 0.1 million State Assistance Loan related to the financial consequences of the COVID-19 pandemic, for the purpose of employment preservation. This loan matures August 2025, with monthly payments, and bears interest rate of 0.53%.

Long-Term Debt Outstanding

As of December 31, 2021 and 2020, long-term debt and other borrowing arrangements consisted of:

	As of December 31,
	2021									2020
(In thousands)	Principal			Deferred Financing Costs, net			Balance			Principal			Deferred Financing Costs, net			Balance
Credit Facility	$	284,170		$	(9,050	)	$	275,120		$	280,993		$	(9,492	)	$	271,501
1st Senior Secured Credit Agreement		107,695			(2,090	)		105,605			107,695			(1,784	)		105,911
2nd Senior Secured Credit Agreement		120,281			(2,473	)		117,808			61,120			(2,261	)		58,859
Revolving Facility		44,500			(190	)		44,310			45,000			(341	)		44,659
Note payable		842			-			842			1,684			-			1,684
Other		1,034			-			1,034			-			-			-
Total long-term debt		558,522			(13,803	)		544,719			496,492			(13,878	)		482,614
Less current portion		(26,061	)		-			(26,061	)		(11,255	)		-			(11,255	)
Total long-term debt, non-current	$	532,461		$	(13,803	)	$	518,658		$	485,237		$	(13,878	)	$	471,359

Future minimum principal payments of long-term debt are as follows: 

Year	Amount
	(In thousands)
2022	$	26,061
2023		82,973
2024		38,461
2025		292,426
2026		37,248
Thereafter		81,353
	$	558,522

For the years ended December 31, 2021, 2020 and 2019, the Company recorded deferred financing costs of $3.0 million, $4.5 million and $2.4 million, respectively, in long-term debt, amortizing the costs over the term of the financing using the straight-line method.

For the years ended December 31, 2021, 2020 and 2019, deferred financing costs charged to interest expense were $3.1 million, $2.1 million and $1.9 million, respectively.

Letters of Credit

As of December 31, 2021 and 2020, the Company had $1.2 million in letters of credit outstanding with financial institutions. The annual fee for letters of credit is 1.0% of the outstanding balance. The letters of credit are secured by a certificate of deposit maintained at the financial institutions and that mature in November 2022.