This Norwegian Cruise Line Stock Sale Is Bad News

There's about to be a lot more Norwegian Cruise Line Holdings (NYSE: NCLH) stock trading on the open market. The country's third-largest cruise line operator put out a prospectus after Wednesday's market close, proposing the resale of up to 46.6 million shares.

Norwegian Cruise Line won't be receiving any money for the stock sale. An affiliate of private equity firm L Catterton, that back in May purchased $400 million in exchangeable notes due in 2026, is hoping to cash out of the debt. With Norwegian Cruise Line stock trading higher than the initial exchange price of $12.10 it's hard to blame the affiliate for going for the quick score. The 46.6 million shares that account for both the exchangeable notes and the payment-in-kind interest would be worth more than $740 million based on Wednesday's close.

Secondary offering announcements have a way of knocking a stock down, so it won't be a surprise if the private equity firm's affiliate will have to settle for less. It will still be a big payday for a two-month bet. At least someone is making money on cruise lines today.

Source Fool.com