Carnival Corp is giving some investors in its debt a chance to own some of the cruiseship giant in exchange for convertible notes.
The Arnold Donald-led shipowner has priced a direct offering of 99.2m common shares at $14.02 per share to a limited number of holders of its 5.75% convertible senior notes due 2023. This equates to about $1.39bn.
New York-listed Carnival plans to use the money to repurchase $886m of the debt securities' principal in privately negotiated transactions.
The company will not receive any proceeds from the transaction, but it will allow it to lower the principal amount on the notes to $1.13bn.
The offering is expected to close on Thursday, excluding 5.5m shares worth $49.3m expected to close on 10 August.
Goldman Sachs is acting as the exclusive placement agent for the offering, while PJT Partners is serving as independent financial advisor to Carnival.
The offering follows a shelf registration that Carnival previously filed with the US Securities and Exchange Commission laying the groundwork for the offer.
Carnival executed its latest financing move amid a slew of Covid-19-related challenges facing the company, the latest being the need to write down two of the 15 ships it plans to sell by as much as $650m.
The impairment is the latest blow for the Miami cruise major as the pandemic has led to an industry-wide pause in operations and to an unprecedented effort to sell vessels.
Carnival's shares which trade on the New York Stock Exchange under the ticker symbol CCL, slid 2.8% to $13.64 within the first half-hour of Thursday's trading.
