8-KMaterial AgreementsFinancial EventsSecurities & Listing+2

CARNIVAL CORP 8-K Report, Material Agreement (Apr 8, 2020)

Filed April 8, 2020For Securities:CCL

Summary

This 8-K filing details Carnival Corporation's successful completion of a $4.00 billion offering of 11.500% First-Priority Senior Secured Notes due 2023. These notes are secured by a substantial pool of assets, including shares of subsidiary guarantors, 86 vessels, intellectual property, and other operational assets, providing collateral for the debt. The proceeds from this offering were placed into an escrow account, with specific release conditions tied to a "Perfected Collateral Loan-to-Value Ratio" not exceeding 25%. This structure aims to provide security to noteholders while allowing for the release of funds to the company as collateral value increases relative to debt. Additionally, the company announced the full exercise of the option for an additional $62.5 million in 5.75% Convertible Senior Notes due 2023.

Key Highlights

  • 1Carnival Corporation closed a $4.00 billion offering of 11.500% First-Priority Senior Secured Notes due 2023.
  • 2The Secured Notes are backed by significant collateral, including 86 vessels, intellectual property, and capital stock of subsidiary guarantors.
  • 3Proceeds from the Notes Offering are held in an escrow account, with phased releases contingent on a 'Perfected Collateral Loan-to-Value Ratio' below 25%.
  • 4The Secured Notes mature on April 1, 2023, with a high annual interest rate of 11.500%.
  • 5The Indenture includes covenants restricting additional indebtedness, restricted payments, asset sales, and other corporate actions.
  • 6The company also announced the closing of an additional $62.5 million in 5.75% Convertible Senior Notes due 2023, following the full exercise of an option.
  • 7The filing emphasizes the material adverse impact of COVID-19 on the company's financial condition, operations, and ability to secure financing.

Frequently Asked Questions

This filing announces the closing of Carnival Corporation's $4.00 billion offering of 11.500% First-Priority Senior Secured Notes due 2023. It also details the terms of these notes, the collateral securing them, and the escrow arrangements for the proceeds.

The Secured Notes are secured by a first-priority security interest in a defined pool of collateral, which includes shares of subsidiary guarantors, 86 of the Company's vessels, material intellectual property, and other operational assets associated with the vessels. These security interests are subject to permitted liens and exclusions outlined in the Indenture.

The net proceeds from the Notes Offering are held in a segregated escrow account. Funds will be released to Carnival Corporation in stages, subject to the collateral's 'Perfected Collateral Loan-to-Value Ratio' remaining at or below 25% after each release. If certain conditions are not met by October 8, 2020, or upon specific bankruptcy events, the remaining proceeds will be used for a special mandatory redemption of the Secured Notes.

The filing also reports the full exercise of the option by initial purchasers for an additional $62.5 million aggregate principal amount of Carnival's 5.75% Convertible Senior Notes due 2023, which also closed on April 8, 2020.