Debt

9 Months Ended

Sep. 30, 2024

Note 6. Debt

Debt consists of the following (in millions):


	Weighted Average Rate (1)	Maturities Through	As of September 30, 2024		As of December 31, 2023
Fixed rate debt:
Unsecured senior notes	5.59%	2026 - 2033	$	9,699	$	7,899
Secured senior notes	—%	2029	—		1,000
Unsecured term loans	3.25%	2027 - 2036	8,024		6,569
Convertible notes	6.00%	2025	323		1,150
Total fixed rate debt			18,046		16,618
Variable rate debt:
Unsecured revolving credit facilities (2)	6.48%	2026 - 2028	210		899
USD unsecured term loan	6.52%	2024 - 2037	2,522		3,666
Euro unsecured term loan	4.95%	2028	261		443
Total variable rate debt			2,993		5,008
Finance lease liabilities			350		369
Total debt (3)			21,389		21,995
Less: unamortized debt issuance costs			(549)		(543)
Total debt, net of unamortized debt issuance costs			20,840		21,452
Less—current portion			(1,868)		(1,720)
Long-term portion			$	18,972	$	19,732

(1) Weighted average interest rates are based on outstanding loan balance as of September 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 September 30, 2024, the interest rate under the unsecured credit facilities was 6.28%. We also pay a facility fee of 0.17% of the total commitments under such facility.

(3) At September 30, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.27% and 6.06%, respectively.

Unsecured revolving credit facilities

As of September 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 September 30, 2024, we had undrawn capacity of $3.5 billion under our unsecured revolving credit facilities.

Debt financing transactions

In March 2024, we issued $1.25 billion of senior unsecured 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 nine months ended September 30, 2024.

In August 2024, we issued $2.0 billion of senior unsecured notes due in 2033 for net proceeds of approximately $1.98 billion. Interest accrues on the notes at a fixed rate of 6.00% per annum and is payable semi-annually in arrears. The proceeds from this notes issuance were used to redeem all of our outstanding $1.0 billion aggregate principal of 9.25% Senior Notes due 2029 and all of our outstanding $1.0 billion aggregate principal amount of 8.25% Senior secured notes due 2029. The

repayment resulted in a loss on extinguishment of debt of $142 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter and nine months ended September 30, 2024.

In August 2024, we completed a privately negotiated exchange with a limited number of holders of the 6.00% Convertible Senior Notes due 2025. The holders exchanged approximately $827 million in aggregate principal amount for approximately 11.4 million shares of common stock and $827 million in cash, including accrued and unpaid interest. The convertible notes exchange resulted in an induced conversion expense of $119 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter and nine months ended September 30, 2024.

In September 2024, we issued $1.5 billion of senior unsecured notes due in 2031 for net proceeds of approximately $1.49 billion in order to repay indebtedness. Interest accrues on the notes at a fixed rate 5.63% per annum and is a payable semi-annually in arrears. Concurrently, we redeemed all of our outstanding $700 million aggregate principal amount of our 7.25% Senior Notes due 2030. The repayment resulted in a loss on extinguishment of debt of $61 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter and nine months ended September 30, 2024.

Export credit facilities and agency guarantees

In May 2024, we took delivery of Silver Ray. To finance the delivery, we borrowed $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 second quarter of 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 nine months ended September 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 September 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, and to maintain minimum liquidity. In July 2024, we amended all of our export credit facilities to eliminate the contractual requirement for us to maintain a minimum level of stockholders' equity. As of September 30, 2024, we were in compliance with our debt covenants and we estimate we will be in compliance for the next twelve months.

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


Year	As of September 30, 2024 (1)
Remainder of 2024	$	717
2025	1,613
2026	2,937
2027	2,609
2028	3,414
Thereafter	10,099
	$	21,389

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