Carnival Corporation & plc Announces Upsizing and Pricing of $3.0 Billion 5.75% Senior Unsecured Notes Offering

Rhea-AI Summary

Carnival Corporation (NYSE: CCL) has announced the pricing of $3.0 billion in senior unsecured notes due 2032 at a 5.75% interest rate. The upsized offering's proceeds will be used to fully repay the company's senior secured term loan facility maturing in 2028, with remaining proceeds and cash on hand allocated to redeem $2.4 billion of 5.750% senior unsecured notes due 2027.

The new notes will pay interest semi-annually starting February 1, 2026, and will mature on August 1, 2032. This strategic transaction advances Carnival's deleveraging efforts, with remaining senior secured debt reduced to $3.1 billion. The offering is expected to close on July 16, 2025, subject to customary conditions.

Positive

• Strategic deleveraging reduces senior secured debt to $3.1 billion
• Investment grade-style covenants included in the new notes indenture
• Security fall away provisions on remaining secured debt upon achieving investment grade rating from two agencies

Negative

• Additional long-term debt commitment through 2032
• Company remains heavily leveraged with significant debt obligations
• Higher interest rate environment impacts borrowing costs at 5.75%

Insights

Financial Analyst

Carnival's $3B debt refinancing extends maturities, replaces secured with unsecured debt, and maintains same interest rate—strategically positioning for potential investment grade status.

Carnival Corporation has successfully upsized its senior unsecured notes offering to $3.0 billion at 5.75% interest with 2032 maturity. This strategic financial maneuver accomplishes several objectives simultaneously. First, the company will use these proceeds to fully repay its senior secured term loan facility maturing in 2028, and then apply remaining proceeds plus cash to redeem $2.4 billion of existing 5.75% senior unsecured notes due 2027.

This transaction reflects a deliberate deleveraging strategy while also optimizing Carnival's debt maturity profile. By extending some maturities from 2027 to 2032, the company gains additional financial flexibility. The interest rate remains unchanged at 5.75%, indicating market confidence in Carnival's financial position despite the longer maturity period.

Most significantly, this refinancing reduces Carnival's secured debt burden. Upon completion, the company will have only $3.1 billion in remaining senior secured debt—all with provisions allowing security to fall away once two of three rating agencies provide investment grade ratings. The new notes feature investment grade-style covenants, signaling Carnival's strategic preparation for potential future rating upgrades.

By replacing secured debt with unsecured notes, Carnival maintains financial flexibility while preserving assets from encumbrances. This transaction demonstrates management's proactive approach to liability management, establishing a clearer pathway toward investment grade status while maintaining stable interest costs even as the company extends its repayment timeline.

Proceeds from the upsized offering of senior unsecured notes to be used to fully repay borrowings under the senior secured term loan facility with remaining net proceeds, together with cash on hand, to be used to redeem $2.4 billion of 5.750% senior unsecured notes due 2027

MIAMI, July 7, 2025 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) today announced that Carnival Corporation (the "Company") priced its private offering (the "Notes Offering") of $3.0 billion aggregate principal amount of 5.750% senior unsecured notes due 2032 (the "Notes"). The aggregate principal amount of Notes to be issued was increased to $3.0 billion.

The Company expects to use the proceeds from the Notes Offering to fully repay the borrowings under Carnival Corporation's first-priority senior secured term loan facility maturing in 2028, with remaining net proceeds, together with cash on hand, to be used to redeem $2.4 billion of the Company's 5.750% senior unsecured notes due 2027 (the "2027 Unsecured Notes").

In connection with the pricing of the Notes Offering, the Company issued a conditional notice of redemption for $2.4 billion aggregate principal amount of the 2027 Unsecured Notes to be redeemed on July 17, 2025 at a redemption price equal to 100.0% of the principal amount of the 2027 Unsecured Notes to be redeemed, plus an applicable "make-whole" premium and accrued and unpaid interest to, but excluding, the redemption date. The redemption is conditioned on the closing of the Notes Offering.

The transaction is a continuation of the Company's strategy to deleverage, manage its future debt maturities and reduce secured debt. Upon completion of this transaction the Company's remaining senior secured debt will be $3.1 billion, all of which has security fall away provisions upon two of the three rating agencies providing the company with an investment grade rating. In addition, the indenture that will govern the Notes will have investment grade-style covenants.

The Notes Offering is expected to close on July 16, 2025, subject to customary closing conditions.

The Notes will pay interest semi-annually on February 1 and August 1 of each year, beginning on February 1, 2026, at a rate of 5.75% per year. The Notes will be unsecured and will mature on August 1, 2032. The Notes will be fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by Carnival plc and certain of the Company's and Carnival plc's subsidiaries that also guarantee our first-priority secured indebtedness, certain of our other unsecured notes and our convertible notes.

This press release does not constitute a notice of redemption with respect to the 2027 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 United States, only to non-U.S. investors pursuant to Regulation S under the Securities Act.

The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.

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, Princess Cruises and Seabourn.

Cautionary Note Concerning Forward-Looking Statements

Certain statements in this press release constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, the financing transactions described herein, future results, operations, outlooks, plans, goals, reputation, cash flows and liquidity and other events which have not yet occurred. Forward-looking statements reflect management's current expectations and are subject to risks, uncertainties and other factors that could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Factors that could affect our results include, among others, those discussed under the caption "Risk Factors" in our most recent annual report on Form 10-K, as well as our other filings with the Securities and Exchange Commission (the "SEC"), copies of which may be obtained by visiting the  Investor Relations page of our website at www.carnivalcorp.com/investors/ or the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE Carnival Corporation & plc

FAQ

What is the size and interest rate of Carnival's (CCL) new notes offering in July 2025?

Carnival Corporation priced $3.0 billion in senior unsecured notes with a 5.75% interest rate, due in 2032.

How will Carnival (CCL) use the proceeds from the July 2025 notes offering?

The proceeds will be used to fully repay the senior secured term loan facility maturing in 2028 and, along with cash on hand, to redeem $2.4 billion of 5.750% senior unsecured notes due 2027.

What is Carnival's (CCL) remaining senior secured debt after this transaction?

After this transaction, Carnival's remaining senior secured debt will be $3.1 billion, with security fall away provisions upon achieving investment grade rating from two agencies.

When will Carnival's (CCL) new 2025 notes begin paying interest?

The notes will pay interest semi-annually on February 1 and August 1, beginning on February 1, 2026, at a rate of 5.75% per year.

When is the closing date for Carnival's (CCL) July 2025 notes offering?

The Notes Offering is expected to close on July 16, 2025, subject to customary closing conditions.