Carnival Reduces Debt with €500M Notes Offering

Carnival Corporation & plc has announced the pricing of a €500 million 5.75% senior unsecured notes offering for refinancing and interest expense reduction. The company also successfully repriced its senior secured first lien term loan B facilities for interest expense and debt reduction.

The proceeds from the offering of senior unsecured notes and cash on hand will be used to redeem €500 million 7.625% senior unsecured notes due 2026. Additionally, cash on hand will be utilized to repay $800 million of the term loan facilities.

As a result of these financial moves, the company expects a reduction in interest expense on the outstanding debt of nearly 2%. The reduction in both interest rates and total debt is anticipated to result in a reduction of net interest expense of over $30 million for the remainder of 2024 and over $50 million on an annualized basis.

The senior unsecured notes, due in 2030, will pay interest annually at a rate of 5.75% per year and will be unsecured. These notes will be fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by Carnival plc and certain subsidiaries.

Following the repricing, the 2028 secured term loan facility will bear interest at a rate per annum equal to SOFR with a 0.75% floor, plus a margin equal to 2.75%. The 2027 secured term loan facility will bear interest at a rate per annum equal to SOFR with a 0.75% floor, plus a margin equal to 2.75%.

The notes offering and repricing transaction are expected to close on April 25, 2024, subject to customary closing conditions and the execution of definitive documentation. The previously announced redemption of the 2026 euro unsecured notes is expected to occur on April 26, 2024, and is conditioned on the closing of the notes offering. The market has reacted to these announcements by moving the company's shares -0.4% to a price of $14.12. Check out the company's full 8-K submission here.

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