8-KOther Events

CARNIVAL CORP 8-K Report, Corporate Update (May 27, 2021)

Filed May 27, 2021For Securities:CCL

Summary

Carnival Corporation (CCL) announced on May 26, 2021, the successful syndication and repricing of its first-priority senior secured term loan facility. This refinancing effort significantly reduces the interest rate on its outstanding dollar and Euro-denominated loans. Specifically, the margin on the U.S. dollar tranche will decrease by 4.50% per annum, and the Euro tranche by 3.75% per annum. These repriced loans are set to mature on June 30, 2025. This debt restructuring is a positive step for Carnival, as it lowers the company's future interest expenses and improves its liquidity position. The reduction in borrowing costs is particularly important given the ongoing challenges faced by the travel and cruise industry due to the COVID-19 pandemic. While the repricing is expected to close on June 30, 2021, subject to customary conditions, it signals improved access to credit markets and a proactive approach to managing its financial obligations.

Key Highlights

  • 1Carnival Corporation successfully repriced its senior secured term loan facility on May 26, 2021.
  • 2The repricing lowers interest rates on outstanding U.S. dollar loans by 4.50% per annum (adjusted LIBOR + 3.00% margin with a 0.75% floor).
  • 3Interest rates on outstanding Euro loans are reduced by 3.75% per annum (EURIBOR + 3.75% margin with a 0.00% floor).
  • 4The term loan facility, totaling $1.86 billion and €800 million, matures on June 30, 2025.
  • 5JPMorgan Chase Bank, N.A. and Barclays Bank PLC acted as joint global coordinators for the repricing.
  • 6The repricing is expected to be implemented via Amendment No. 2 to the facility and is anticipated to close on June 30, 2021.
  • 7PJT Partners served as the independent financial advisor to Carnival Corporation for this transaction.

Frequently Asked Questions

The main impact for investors is a reduction in Carnival's future interest expenses due to the lower interest rates on a significant portion of its debt. This improves the company's profitability and cash flow, especially during a challenging period for the travel industry.

The repricing is expected to be implemented via Amendment No. 2 to the term loan facility and is expected to close on June 30, 2021, subject to customary closing conditions and the execution of definitive documentation. The new rates will apply from that date onwards.

No, this filing concerns the repricing of existing debt, not an increase or decrease in the principal amount of the debt. The original aggregate principal amounts remain $1,860 million and €800 million.

This section is a standard legal disclosure highlighting the inherent risks and uncertainties associated with forward-looking statements. It reminds investors that actual future results could differ materially from management's expectations due to various factors, including the ongoing impact of COVID-19, potential covenant breaches, global events affecting travel, and operational or regulatory risks.