Carnival Corp has taken out a $1.5bn loan to buy back more of the $4bn in high interest 2023 notes sold in the spring of 2020 soon after the pandemic put a stop to cruising.
The Arnold Donald-led owner of 91 cruiseships plans to start "marketing" a first-priority secured term loan facility in that amount, maturing in 2028, according to a regulatory filing.
New York-listed Carnival did not say how much of the new loan would go to the 2023 notes, which carry an 11.5% interest rate, or what the premium is on the 2028 debt.
The cruise giant also did not disclose the lender.
"The company intends to use the proceeds from the term loan facility to redeem a portion of the company’s 11.5% first priority senior secured notes due 2023 ... including related accrued interest, fees and expenses," Carnival said in the filing.
"This disclosure does not constitute a notice of redemption with respect to the 2023 notes."
PJT Partners is serving as an independent financial advisor to Carnival, which has not immediately returned calls.
Miami-based Carnival on 8 April closed a private offering of $4bn of 11.5% first-priority senior notes due 2023, backed by 86 vessels worth $28.6bn as of 29 February.
The company on 26 July closed a private offering of $2.4bn in 4% first-priority senior secured notes due in 2028 and used that money to buy back that amount of 2023 notes.
On Wednesday, Carnival reported a $2.84bn loss for the third quarter, registering its seventh straight quarter of red ink as a result of the pandemic.
