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Debt | 12 Months Ended
--- | ---
Dec. 31, 2018
Debt Disclosure [Abstract] |
Debt | Debt Debt consists of the following (in thousands):
|  |  |  |  |  | As of December 31,
|  | Interest Rate |  | Maturities Through |  | 2018 |  | 2017
Fixed rate debt: |  |  |  |  |  |  |  |
Senior notes |  | 2.65% to 7.50% |  | 2020 - 2028 |  | $ | 1,724,194 |  |  | $ | 1,866,359 |
Secured senior notes |  | 7.25% |  | 2025 |  | 670,437 |  |  | — |
Unsecured term loans |  | 2.53% to 5.41% |  | 2021 - 2030 |  | 2,148,351 |  |  | 333,351 |
Total fixed rate debt |  |  |  |  |  | 4,542,982 |  |  | 2,199,710 |
Variable rate debt (1): |  |  |  |  |  |  |  |
Unsecured revolving credit facilities(2) |  | 3.54% to 3.61% |  | 2020 - 2022 |  | 795,000 |  |  | 580,000 |
Commercial paper |  | 3.19% |  | 2019 |  | 775,488 |  |  | — |
USD unsecured term loan |  | 2.92% to 6.52% |  | 2019 - 2028 |  | 4,005,848 |  |  | 4,079,670 |
Euro unsecured term loan |  | 1.15% to 1.58% |  | 2021 - 2028 |  | 734,176 |  |  | 814,085 |
Total variable rate debt |  |  |  |  |  | 6,310,512 |  |  | 5,473,755 |
Capital lease obligations |  |  |  |  |  | 130,944 |  |  | 33,139 |
Total debt (3) |  |  |  |  |  | 10,984,438 |  |  | 7,706,604 |
Less: unamortized debt issuance costs |  |  |  |  |  | (206,739 | ) |  | (167,153 | )
Total debt, net of unamortized debt issuance costs |  |  |  |  |  | 10,777,699 |  |  | 7,539,451 |
Less—current portion including commercial paper |  |  |  |  |  | (2,422,329 | ) |  | (1,188,514 | )
Long-term portion |  |  |  |  |  | $ | 8,355,370 |  |  | $ | 6,350,937 |
(1) | Calculation based on outstanding loan balance and interest rate as of December 31, 2018. For variable rate debt, interest rate includes either LIBOR or EURIBOR plus the applicable margin.
(2) | Includes $1.4 billion facility due in 2020 and $1.2 billion due in 2022, each of which accrue interest at LIBOR plus 1.10%, currently 3.91%, and are subject to a facility fee of 0.15%.
(3) | At December 31, 2018 and 2017, the weighted average interest rate for total debt was 4.14% and 3.92%, respectively.
In October 2018, we took delivery of Celebrity Edge. Through a novation agreement we put in place in June 2016, we had the right, but not the obligation, to finance the final installment payable to the shipyard by assuming upon our delivery and acceptance of the ship the debt indirectly incurred by the shipbuilder during the construction of the ship. We borrowed a total of $729.0 million (inclusive of the amount novated to us). The loan, which is unsecured, amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.23%. In our consolidated statement of cash flows for the year ended December 31, 2018, the acceptance of the ship and satisfaction of our obligation under the shipbuilding contract was classified as an outflow and constructive disbursement within Investing Activities while the amounts novated and effectively advanced from our lenders under our previously committed financing arrangements were classified as an inflow and constructive receipt within Financing Activities. On July 31, 2018, we closed on the Silversea Cruises acquisition and subsequently drew in full on an unsecured credit agreement in the amount of $700 million due July 2019. We are required to prepay the loan with the proceeds of certain debt issuances prior to maturity. Interest on the loan accrues at a floating rate based on LIBOR plus a margin that varies with our credit rating and which is currently 1.00%. Upon our acquisition of Silversea Cruises, we recorded, at a fair value of $672.0 million, 7.25% senior secured notes with a principal amount of $620 million due February 2025, in accordance with ASC 805. The notes were previously issued by Silversea Cruise Finance Ltd., a wholly owned subsidiary of Silversea Cruises, and are guaranteed and secured by substantially all of the assets of Silversea Cruises and a number of its subsidiaries, subject to certain exceptions. Refer to Note 3. Business Combination for further information on the Silversea Cruises acquisition. In June 2018, we established a commercial paper program pursuant to which we may issue short-term unsecured notes from time to time in an aggregate amount of up to $1.2 billion. The interest rate for the commercial paper notes varies based on duration, market conditions and our credit ratings. The maturities of the commercial paper notes can vary, but cannot exceed 397 days from the date of issuance. We use the proceeds from our commercial paper notes for general corporate purposes. The commercial paper issued is backstopped by our revolving credit facilities. As of December 31, 2018, we had $777.0 million of commercial paper notes outstanding with a weighted average interest rate of 3.19% and a weighted average maturity of approximately 23 days. In March 2018, we took delivery of Symphony of the Seas. Through a novation agreement we put in place in January 2015, we had the right, but not the obligation, to finance the final installment payable to the shipyard by assuming upon our delivery and acceptance of this ship the debt indirectly incurred by the shipbuilder during the construction of the ship. We borrowed a total of $1.2 billion (inclusive of the amount novated to us). The loan, which is unsecured, amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.82%. In our consolidated statement of cash flows for the year ended December 31, 2018, the acceptance of the ship and satisfaction of our obligation under the shipbuilding contract was classified as an outflow and constructive disbursement within Investing Activities while the amounts novated and effectively advanced from our lender under our previously committed financing arrangements were classified as an inflow and constructive receipt within Financing Activities. In March 2018, we entered into and drew in full on a credit agreement in the amount of $130.0 million due February 2023. The loan accrues interest at a floating rate of LIBOR plus an applicable margin. The applicable margin varies with our debt rating and was 1.195% as of December 31, 2018. Amounts from the issuance of this loan were used for capital expenditures. Except for Celebrity Flora, 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. In consideration for these guarantees, depending on the financing arrangement, we pay to the applicable export credit agency (1) a fee of 0.77% per annum based on the outstanding loan balance semi-annually over the term of the loan (subject to adjustment based upon our credit ratings) or (2) an upfront fee of 2.35% to 2.37% of the maximum loan amount. We amortize the fees that are paid upfront over the life of the loan and those that are paid semi-annually over each respective payment period. 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. In our consolidated statements of cash flows, we classify these fees within Amortization of debt issuance costs. Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating. The unsecured senior notes and senior debentures are not redeemable prior to maturity, except that certain series may be redeemed upon the payment of a make-whole premium. Capital Leases Silversea Cruises operates two ships, the Silver Whisper and Silver Explorer, under capital leases. The capital lease for the Silver Whisper will expire in 2022, subject to an option to purchase the ship, and the capital lease for the Silver Explorer will expire in 2021, subject to an option to extend the lease for up to an additional six years. The total aggregate amount of the finance lease obligations recorded for these ships at the acquisition date was $82.8 million. The lease payments on the Silver Whisper are subject to adjustments based on the LIBOR rate. Refer to Note 3. Business Combination for further information regarding the assets acquired and liabilities assumed in the Silversea Cruises acquisition. Following is a schedule of annual maturities on our total debt net of debt issuance costs, and including capital leases and commercial paper, as of December 31, 2018 for each of the next five years (in thousands):
Year |
2019 | $ | 2,422,329 |
2020 | 1,681,978 |
2021 | 843,976 |
2022 | 1,607,975 |
2023 | 664,025 |
Thereafter | 3,557,416 |
| $ | 10,777,699 |

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