Carnival Corporation & plc Announces Pricing of €500 Million 5.75% Senior Unsecured Notes Offering for Refinancing and Interest Expense Reduction and Successful Repricing of Senior Secured First Lien Term Loan B Facilities for Interest Expense and Debt Reduction
- Successful pricing of €500 million 5.75% senior unsecured notes offering for refinancing and interest expense reduction
- Redemption of €500 million 7.625% senior unsecured notes due 2026 to reduce interest expenses
- Repricing of senior secured term loan B facilities to lower debt and interest costs
- Expected reduction of over $30 million in net interest expenses for 2024 and over $50 million annually
- Notes Offering and Repricing Transaction as part of debt reduction and capital structure simplification strategy
- Expected annual interest rate of 5.75% for the Notes and SOFR-based interest rates for term loan facilities with a 2.75% margin
- Notes not registered under the Securities Act or state securities laws for sale in the US
- Potential risk associated with offering to qualified institutional buyers and non-US investors only
Proceeds from the offering of senior unsecured notes and cash on hand to be used to redeem
In addition, the Company has received commitments from lenders to reprice its first-priority senior secured term loan facility maturing in 2028 (the "2028 Secured Term Loan Facility") and its first-priority senior secured term loan facility maturing in 2027 (the "2027 Secured Term Loan Facility" and, such transaction, the "Repricing Transaction"). As part of the Repricing Transaction, the Company expects to make a partial prepayment of
The Notes Offering, the redemption of the 2026 Euro Unsecured Notes and the Repricing Transaction are a continuation of the Company's ongoing debt and interest expense reduction and capital structure simplification. Together, the reduction in both interest rates and total debt is expected to result in a reduction of net interest expense of over
The Notes Offering and Repricing Transaction are expected to close on April 25, 2024, subject to customary closing conditions and the execution of definitive documentation. The previously announced redemption of the 2026 Euro Unsecured Notes is expected to occur on April 26, 2024 and is conditioned on the closing of the Notes Offering.
The Notes will pay interest annually on January 15 of each year, beginning on January 15, 2025, at a rate of
After implementation of the repricing, the 2028 Secured Term Loan Facility will bear interest at a rate per annum equal to SOFR with a
PJT Partners is serving as independent financial advisor to Carnival Corporation & plc.
This press release does not constitute a notice of redemption with respect to the 2026 Euro Unsecured Notes.
The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside
The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in
This press release shall not constitute an offer to sell or the solicitation of an offer to purchase the Notes or any other securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such offering, solicitation or sale would be unlawful.
About Carnival Corporation & plc
Carnival Corporation & plc is the largest global cruise company, and among the largest leisure travel companies, with a portfolio of world-class cruise lines - AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises (
Cautionary Note Concerning Forward-Looking Statements
Carnival Corporation and Carnival plc and their respective subsidiaries are referred to collectively in this press release, as "Carnival Corporation & plc," "our," "us" and "we." Some of the statements, estimates or projections contained in this press release are "forward-looking statements" that involve risks, uncertainties and assumptions with respect to us, including some statements concerning the financing transactions described herein, future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like "will," "may," "could," "should," "would," "believe," "depends," "expect," "goal," "aspiration," "anticipate," "forecast," "project," "future," "intend," "plan," "estimate," "target," "indicate," "outlook," and similar expressions of future intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:
• Pricing | • Adjusted net income (loss) |
• Booking levels | • Adjusted EBITDA |
• Occupancy | • Adjusted earnings per share |
• Interest, tax and fuel expenses | • Adjusted free cash flow |
• Currency exchange rates | • Net per diems |
• Goodwill, ship and trademark fair values | • Net yields |
• Liquidity and credit ratings | • Adjusted cruise costs per ALBD |
• Investment grade leverage metrics | • Adjusted cruise costs excluding fuel per ALBD |
• Estimates of ship depreciable lives and residual values | • Adjusted return on invested capital |
• The transactions described herein |
Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by our substantial debt balance incurred during the pause of our guest cruise operations. There may be additional risks that we consider immaterial or which are unknown. These factors include, but are not limited to, the following:
- Events and conditions around the world, including geopolitical uncertainty, war and other military actions, inflation, higher fuel prices, higher interest rates and other general concerns impacting the ability or desire of people to travel have led, and may in the future lead, to a decline in demand for cruises as well as negative impacts to our operating costs and profitability.
- Pandemics have in the past and may in the future have a significant negative impact on our financial condition and operations.
- Incidents concerning our ships, guests or the cruise industry have in the past and may, in the future, negatively impact the satisfaction of our guests and crew and lead to reputational damage.
- Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-money laundering, anti-corruption, economic sanctions, trade protection, labor and employment, and tax may be costly and have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties and reputational damage.
- Factors associated with climate change, including evolving and increasing regulations, increasing global concern about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and increasing frequency and/or severity of adverse weather conditions could adversely affect our business.
- Inability to meet or achieve our targets, goals, aspirations, initiatives, and our public statements and disclosures regarding them, including those that are related to sustainability matters, may expose us to risks that may adversely impact our business.
- Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices, information technology operations and system networks and failure to keep pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and may lead to reputational damage.
- The loss of key team members, our inability to recruit or retain qualified shoreside and shipboard team members and increased labor costs could have an adverse effect on our business and results of operations.
- Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely impact our scheduled itineraries and costs.
- We rely on supply chain vendors who are integral to the operations of our businesses. These vendors and service providers may be unable to deliver on their commitments, which could negatively impact our business.
- Fluctuations in foreign currency exchange rates may adversely impact our financial results.
- Overcapacity and competition in the cruise and land-based vacation industry may negatively impact our cruise sales, pricing and destination options.
- Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact our business operations and the satisfaction of our guests.
- We require a significant amount of cash to service our debt and sustain our operations. Our ability to generate cash depends on many factors, including those beyond our control, and we may not be able to generate cash required to service our debt and sustain our operations.
- Our substantial debt could adversely affect our financial health and operating flexibility.
- The risk factors included in Carnival Corporation's and Carnival plc's Annual Report on Form 10-K filed with the SEC on January 26, 2024 and Carnival Corporation's and Carnival plc's Quarterly Report on Form 10-Q filed with the SEC on March 27, 2024.
The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.
Forward-looking and other statements in this document may also address our sustainability progress, plans, and goals (including climate change and environmental-related matters). In addition, historical, current, and forward-looking sustainability- and climate-related statements may be based on standards and tools for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions and predictions that are subject to change in the future and may not be generally shared.
SOURCE Carnival Corporation & plc
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FAQ
What is the purpose of the €500 million 5.75% senior unsecured notes offering by Carnival & plc?
When are the Notes Offering and Repricing Transaction expected to close?
What is the annual interest rate for the Notes offered by Carnival & plc?
Who is serving as the financial advisor to Carnival & plc for these transactions?
Are the Notes being offered to the general public in the United States?
