8-KMaterial AgreementsExhibits & Filings

CARNIVAL CORP 8-K Report, Material Agreement (Jul 1, 2020)

Filed July 1, 2020For Securities:CCL

Summary

This 8-K filing from Carnival Corporation (CCL) dated July 1, 2020, primarily addresses the conversion rights associated with its 5.75% Convertible Senior Notes due 2023. The company has notified holders that the condition for conversion has been met, allowing noteholders to convert their notes into Carnival Corporation common stock during the calendar quarter beginning July 1, 2020, and ending September 30, 2020. This conversion is based on a fixed rate of 100.0000 shares of common stock per $1,000 principal amount of notes. Additionally, the filing details a First Supplemental Indenture executed on June 30, 2020. This amendment corrects an ambiguity in the original indenture by changing the reference from 'calendar quarter' to 'fiscal quarter' for determining future conversion eligibility. This change ensures that conversion rights are assessed based on Carnival's fiscal periods, aligning with the company's operational structure. The filing also includes the standard cautionary note regarding forward-looking statements and the significant risks posed by the ongoing COVID-19 pandemic.

Key Highlights

  • 1Carnival Corporation has triggered the conversion right for its 5.75% Convertible Senior Notes due 2023, allowing holders to convert into common stock.
  • 2The conversion period for these notes is now open from July 1, 2020, to September 30, 2020.
  • 3The conversion rate is fixed at 100.0000 shares of common stock per $1,000 principal amount of notes.
  • 4A First Supplemental Indenture was executed to correct references from 'calendar quarter' to 'fiscal quarter' regarding conversion conditions, aligning with the company's fiscal periods.
  • 5The correction clarifies that future conversion eligibility will be determined based on 20 trading days within a 30-day period ending on the last day of the preceding fiscal quarter, provided the stock price meets certain thresholds.
  • 6The filing reiterates the significant negative impact of the COVID-19 pandemic on the company's operations, liquidity, and outlook.
  • 7Carnival Corporation acknowledges the risk of non-compliance with debt covenants if operations cannot resume in the near-term.

Frequently Asked Questions

The main purpose of this filing is to inform investors and noteholders that Carnival Corporation has met the conditions to allow for the conversion of its 5.75% Convertible Senior Notes due 2023 into common stock. It also details an amendment to the indenture governing these notes.

Noteholders can convert their convertible notes at any time during the calendar quarter starting on July 1, 2020, and ending on September 30, 2020.

The conversion rate is fixed at 100.0000 shares of Carnival Corporation common stock for every $1,000 principal amount of convertible notes.

A supplemental indenture was executed to correct an error in the original indenture. It changes the reference from 'calendar quarter' to 'fiscal quarter' in the provision that determines when conversion rights are triggered. This ensures that the company's fiscal periods, not just calendar periods, are used for assessing future conversion eligibility, aligning with company operations.

The filing explicitly states that COVID-19 has had, and is expected to continue to have, a significant negative impact on Carnival's financial condition, operations, and liquidity. This context is crucial for understanding the company's financial health and its ability to navigate the ongoing pandemic, including potential impacts on debt covenants and resuming operations.