Carnival prices $3.0 billion bond offering, plans debt restructuring

Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced Monday it priced a private offering of $3.0 billion in 5.75% senior unsecured notes due 2032. The cruise company increased the aggregate principal amount from an initial smaller offering size.

The company plans to use proceeds to fully repay borrowings under its first-priority senior secured term loan facility maturing in 2028. Remaining net proceeds, combined with cash on hand, will be used to redeem $2.4 billion of existing 5.75% senior unsecured notes due 2027.

Carnival issued a conditional notice of redemption for $2.4 billion of the 2027 notes, scheduled for July 17 at 100% of principal amount plus a make-whole premium and accrued interest. The redemption is contingent on closing the new notes offering.

The transaction continues the company's strategy to reduce leverage, manage future debt maturities and decrease secured debt. Upon completion, Carnival's remaining senior secured debt will total $3.1 billion, all of which includes security fall-away provisions if two of three rating agencies assign investment grade ratings.

The notes offering is expected to close July 16, subject to customary closing conditions. The new notes will pay 5.75% interest semi-annually on February 1 and August 1 each year, beginning February 1, 2026, and mature August 1, 2032.

The notes will be guaranteed by Carnival plc and certain subsidiaries that also guarantee the company's first-priority secured debt and other unsecured notes. The notes are being offered to qualified institutional buyers under Rule 144A and to non-U.S. investors under Regulation S.

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