Carnival Corp has closed its previously announced private offering of $500m in notes and upsized a $1.3bn loan facility, the proceeds of which will go toward paying off $1.2bn in high-cost debt.
The New York-listed owner of 95 cruise ships said a week ago that it would use the money to pay off $775m in 10.5% second-priority senior secured notes and €425m in 10.125% second-priority senior secured notes, both maturing in 2026.
Carnival expects this move to save $120m a year because the $500m in first-priority senior secured notes has a semi-annual 7% interest rate, while the new first-term term loan facility has a yearly interest rate that is equal to the secured overnight financing rate with a 0.75% floor and 3% margin.
The notes will mature in 2029 and the loan facility will mature in 2027, Carnival said.
They are both secured by, among other things, vessel mortgages and related vessel collateral, intellectual property and ship-related assets such as inventory, computer software and casino equipment.
PJT Partners served as an independent financial advisor to Carnival.
Josh Weinstein-led Carnival expects its pandemic-caused debt to be less than $32bn by the end of this year, down from a peak of $35.1bn at the end of February 2023.
Carnival posted a $407m net loss for the second quarter of 2023 in late June, versus a $1.83bn net loss during the same period last year.
Second-quarter revenue came in at $4.91bn, more than double the $2.4bn earned in the second quarter of 2022.
