Carnival Corp has cut interest rate costs as it continues to simplify its capital structure.
The US-listed cruise ferry owner said on Friday it has reduced interest expenses by $50m after refinancing a €500m ($530m) bond and loans of $3.6bn.
In a private offering, Carnival priced €500m of 5.75% senior unsecured notes due 2030.
The company will use the net proceeds, together with cash on hand, to redeem its €500m 7.625% senior unsecured notes due 2026.
The redemption will slash interest expense on this outstanding debt by nearly 2%.
The company has also received commitments from lenders to reprice its $2.3bn first-priority senior secured term loan facility maturing in 2028 and its $1.3bn first-priority senior secured term loan facility maturing in 2027.
It expects to make a partial prepayment of $500m under the 2028 loan facility and a partial prepayment of $300m under the 2027 loan facility.
Both facilities will bear an interest rate aligned with the secured overnight financing rate, with a 0.75% floor, plus a margin equal to 2.75%.
The refinancing of the bond and the prepayments will result in a total reduction of net interest expense of over $30m for the remainder of 2024 and over $50m annually.
The notes offering and loan repricing are expected to close on 25 April.
The bond redemption is expected to occur on 26 April.
PJT Partners is serving as an independent financial adviser to Carnival Corp.
Carnival reported its best-ever first-quarter revenue of $5.41bn in March, as booking volumes soared to an all-time high.
It raised its net yield guidance for the full year of 2024 by more than a point to about 9.5%.
