8-KMaterial AgreementsFinancial Events

CARNIVAL CORP 8-K Report, Material Agreement (Aug 9, 2019)

Filed August 9, 2019For Securities:CCL

Summary

Carnival Corporation (CCL) announced on August 9, 2019, via an 8-K filing, the execution of an amended and restated five-year multi-currency revolving credit agreement. This new facility, valued at $1.7 billion, €1.0 billion, and £150 million, replaces and amends previous credit agreements dating back to 2011. The primary purpose of this facility is to provide flexible financing for general corporate purposes and to support commercial paper borrowings, offering significant liquidity for the company's operations. Key investor considerations include the inclusion of an emissions-linked margin adjustment, which incentivizes Carnival to meet certain annual carbon emissions goals, aligning financial costs with sustainability performance. The agreement includes standard covenants and events of default, with an expiration date of August 6, 2024, subject to two one-year extension options. The company and its subsidiaries have guaranteed obligations, and cross-guarantees are in place between Carnival Corporation and Carnival plc.

Key Highlights

  • 1Carnival entered into an amended and restated $1.7 billion, €1.0 billion, and £150 million multi-currency revolving credit facility on August 6, 2019.
  • 2The new credit facility has a five-year term, expiring on August 6, 2024, with two one-year extension options.
  • 3Borrowings under the facility bear interest at LIBOR/EURIBOR plus a margin based on Carnival's credit ratings.
  • 4A significant feature is an emissions-linked margin adjustment, linking the interest rate to the achievement of specific annual carbon emissions goals.
  • 5The credit facility is available for general corporate purposes and to support commercial paper borrowings, ensuring liquidity.
  • 6Carnival Corporation and Carnival plc have provided guarantees for the obligations of their respective subsidiaries, with cross-guarantees between the parent entities.
  • 7The agreement includes customary representations, warranties, covenants, and events of default.

Frequently Asked Questions

The primary purpose of the amended and restated credit agreement is to provide Carnival Corporation and its subsidiaries with flexible financing for general corporate purposes and to support their commercial paper borrowings. It ensures continued access to liquidity for the company's operational needs.

The emissions-linked margin adjustment means that the interest rate margin applied to borrowings under the credit facility can be adjusted based on Carnival's performance in achieving agreed-upon annual carbon emissions reduction goals. This structure potentially lowers borrowing costs if the company meets its environmental targets.

The multi-currency revolving credit facility has a total size of $1.7 billion, €1.0 billion, and £150 million. It has an initial term of five years, expiring on August 6, 2024, with the option for two additional one-year extensions.

Yes, both Carnival Corporation and Carnival plc have guaranteed the obligations of their respective subsidiaries under the Facility Agreement. Additionally, there are cross-guarantees between Carnival Corporation and Carnival plc for each other's respective obligations.