of serious debt trouble.

Kloster, which owns the company that sends the cruise ship Dreamward to Bermuda, completed a major bond issue on Wednesday that enabled her to take delivery of a new ship, the 1,246-passenger Windward .

A prospectus on the bond issue showed the company had lost $32.7 million in the past two years, and raised the spectre of the company being unable to take delivery of the Windward if its refinancing bid failed.

But yesterday, Kloster director and vice-president, Sen. Wendell Hollis, said: "As a result of the refinancing, the company no longer has those financial difficulties.'' The quick success of the sale indicates strong confidence in the cruise industry and in Kloster, the fourth largest cruise company in the world.

Kloster is tied to serving the Bermuda market weekly through a ten-year contract with the Government.

This year the company's subsidiary, Norwegian Cruise Lines, replaced the Westward with the larger Dreamward , an arrangement enabling the Island to draw up to 14,000 more cruise visitors.

The prospectus released for the bond issue showed Kloster lost $19.1 million in 1991 and $13.6 million in 1992 and expected to lose more money this year.

The prospectus, prepared by underwriters Salomon Brothers and First Boston Corp., said Kloster "is highly leveraged and substantially all of its assets are mortgaged or subject to other security interests''.

It said three of Kloster's affiliated companies failed to meet conditions of bank loans, meaning lenders had the right to seize control of the cruise lines. Kloster's other affiliated companies are Royal Cruise Lines and Royal Viking Cruise Lines.

Cruise analyst Mr. James Parker said of Kloster's situation before the bond offering that there were "all kinds of risk factors''.

"It seems to me that the only way an investor would go into a situation like that is where there are valuable assets backing the notes.'' The notes are secured by mortgates on two ships: the Norway , appraised at $182 million; and the Seaward apparaised at $177.5 million.

Kloster employs 850 people at its Coral Gables, Florida headquarters and 6,335 people worldwide.

Kloster is represented in Bermuda by Meyer Agencies. Sen. Hollis is senior partner at the law firm of Mello, Hollis, Jones and Martin.

Sen. Wendell Hollis.