8-KMaterial AgreementsFinancial Events

CARNIVAL CORP 8-K Report, Material Agreement (May 19, 2011)

Filed May 19, 2011For Securities:CCL

Summary

Carnival Corporation and Carnival plc have announced the execution of a new five-year multi-currency credit facility agreement, effective May 18, 2011. This new facility totals US$1.6 billion, £150 million, and €450 million, replacing a previous credit agreement that was scheduled to expire in October 2012. The new agreement provides financial flexibility for general corporate purposes and support for commercial paper borrowings. This strategic refinancing demonstrates the company's proactive approach to managing its liquidity and capital structure. The new facility has a maturity date of May 18, 2016, and its interest rate is tied to LIBOR/EURIBOR plus a margin that adjusts based on Carnival's credit rating, currently set at 0.65%. The agreement includes standard covenants and provisions, and importantly, both Carnival Corporation and Carnival plc have cross-guaranteed each other's obligations under this new facility.

Key Highlights

  • 1New five-year multi-currency credit facility agreement signed on May 18, 2011.
  • 2Total facility amount is US$1.6 billion, £150 million, and €450 million.
  • 3The new facility replaces a previous US$1.2 billion, €400 million, and £200 million revolving credit agreement set to expire in October 2012.
  • 4Maturity date for the new facility is May 18, 2016.
  • 5Interest rate is based on LIBOR/EURIBOR plus a margin of 0.65% (currently), dependent on Carnival's credit rating.
  • 6Funds can be used for general corporate purposes and to back commercial paper borrowings.
  • 7Carnival Corporation and Carnival plc have cross-guaranteed each other's obligations under this new facility.

Frequently Asked Questions

This 8-K filing primarily announces the entry into a new, significant material definitive agreement: a five-year multi-currency credit facility for Carnival Corporation and Carnival plc.

The new facility is larger in its US dollar component (US$1.6 billion vs. US$1.2 billion) and has a longer maturity (May 2016 vs. October 2012). It replaces the older, soon-to-expire credit agreement.

The interest rate is tied to LIBOR or EURIBOR plus a margin that varies with Carnival's credit rating, currently at 0.65%. The company also pays a commitment fee on unused portions and a utilization fee on outstanding borrowings.

The cross-guarantee means that each parent company guarantees the obligations of the other under this facility. This strengthens the creditworthiness of the facility as a whole, as both entities are financially committed.