Carnival Corporation & plc has just announced the closing of a $2.0 billion 6.125% senior unsecured notes offering for the purpose of refinancing and interest expense reduction. This transaction included the redemption of $2.03 billion 10.375% senior priority notes, resulting in a reduction in interest expense of over 4%.
The company's strategy to reduce interest expense, simplify its capital structure, and manage its future debt maturities is evident in this move. The transaction is expected to reduce net annual interest expense by over $80 million, and the indenture that governs the notes has investment grade-style covenants.
The notes offered will pay interest semi-annually at a rate of 6.125% per year and will mature on February 15, 2033. They will be fully and unconditionally guaranteed on an unsecured basis by Carnival plc and certain subsidiaries.
It's essential to note that the notes were offered only to qualified institutional buyers and non-U.S. investors, and they were not registered under the securities act or any state securities laws.
This move is part of Carnival Corporation & plc's ongoing efforts to manage its debt effectively and reduce interest expenses, a crucial aspect of its financial strategy. Following these announcements, the company's shares moved -2.5%, and are now trading at a price of $26.75. For the full picture, make sure to review Carnival's 8-K report.
