8-KMaterial AgreementsFinancial EventsOther Events+1

CARNIVAL CORP 8-K Report, Material Agreement (May 25, 2022)

Filed May 25, 2022For Securities:CCL

Summary

Carnival Corporation & plc (CCL) announced on May 25, 2022, the successful closing of a private offering of $1.0 billion in aggregate principal amount of 10.500% Senior Unsecured Notes due 2030. The net proceeds from this offering are earmarked for scheduled debt principal payments in fiscal year 2023 and general corporate purposes, including potential debt repayments and financing related to property, plant, and equipment, particularly vessels. This issuance aims to bolster the company's liquidity and manage its debt obligations. The notes carry a significant interest rate of 10.500%, payable semi-annually, and are callable starting June 1, 2025. The indenture governing these notes includes various covenants that restrict the company's ability to incur additional debt, make restricted payments, sell assets, and other actions. Notably, many of these covenants will be permanently removed if the notes achieve investment-grade ratings from at least two major credit rating agencies and no event of default is ongoing.

Key Highlights

  • 1Carnival Corp. successfully closed a $1.0 billion offering of 10.500% Senior Unsecured Notes due 2030.
  • 2Net proceeds will be used for fiscal 2023 debt payments and general corporate purposes, including vessel-related expenses.
  • 3The notes carry a high interest rate of 10.500% and mature on June 1, 2030.
  • 4The notes are callable by Carnival starting June 1, 2025.
  • 5The associated indenture imposes covenants that limit debt incurrence, restricted payments, asset sales, and other corporate actions.
  • 6Key covenants may be permanently waived if the notes achieve an investment-grade rating from two of three major credit agencies (S&P, Moody's, Fitch).
  • 7A change of control event would trigger an offer to repurchase the notes at 101% of the principal amount.

Frequently Asked Questions

The primary purpose of this $1.0 billion debt issuance is to fund scheduled principal payments on existing debt during fiscal year 2023 and for general corporate purposes. This includes managing other indebtedness and financing or refinancing costs related to property, plant, and equipment, such as vessels.

The Senior Unsecured Notes have a principal amount of $1.0 billion, mature on June 1, 2030, and carry a semi-annual interest rate of 10.500%. They are unsecured and guaranteed jointly and severally by Carnival plc and certain subsidiaries. The notes can be called by Carnival starting June 1, 2025, with specific redemption prices outlined in the indenture.

The indenture includes covenants that place restrictions on Carnival Corporation & plc and its restricted subsidiaries. These limitations cover actions such as incurring additional debt, making dividend payments or other restricted payments, making investments, selling assets, creating liens, and engaging in affiliate transactions. However, many of these covenants will fall away permanently if the notes achieve an investment-grade rating from two of the three major credit rating agencies (S&P, Moody's, Fitch) while no event of default is continuing.

These are Senior Unsecured Notes, meaning they are not backed by specific collateral. They are guaranteed on an unsecured basis by Carnival plc and certain of its subsidiaries.