Carnival Corp has increased the amount of money it is borrowing, with the expectation that it will save millions of dollars in interest payments on high-interest notes.
The Arnold Donald-led owner of 91 ships has entered into a $2.3bn term loan facility with an undisclosed lender after putting out feelers last week for a $1.5bn commitment.
New York-listed Carnival plans to use the first-priority senior secured term loan to redeem $2bn of remaining 11.5% first-priority senior secured notes due 2023.
The new loan, maturing in 2028, is expected to save more than $135m in interest costs with a lower annual interest rate equal to Libor with a 0.75% floor plus a 3.25% margin.
Carnival expects to pay back the loan facility through an incremental assumption agreement tied to a $1.86bn and €800m ($926m) term loan entered into on 30 June 2020 that is set to close on 18 October.
JPMorgan Chase Bank acted as sole global coordinator for the marketing of the loan facility.
PJT Partners served as Carnival's independent financial advisor for the loan.
Carnival Corp on 29 September posted a seventh consecutive quarter of huge losses as a result of the pandemic while also achieving record bookings for the second half of next year.
The Miami-based owner reported a $2.84bn deficit for the third quarter versus a $2.86bn loss for the same period last year.
It registered an adjusted loss of $1.99bn against an adjusted deficit of $1.7bn a year earlier.
Carnival's shares, which trade on the New York Stock Exchange under the ticker symbol CCL, slid 2.5% to $23.89 by Friday's mid-afternoon trading on Wall Street.
