Carnival Corp closes $3 billion senior unsecured notes offering

MIAMI - Carnival Corporation & plc (NYSE/LSE:CCL; NYSE:CUK) has closed a $3 billion private offering of 5.75% senior unsecured notes due 2032, the cruise operator announced Wednesday.

The company will use the proceeds to fully repay borrowings under its first-priority senior secured term loan facility maturing in 2028. The remaining funds, combined with cash on hand, will redeem $2.4 billion of Carnival’s 5.75% senior unsecured notes due 2027. This refinancing comes as the company manages its total debt of $28.65 billion, with InvestingPro analysis showing current short-term obligations exceeding liquid assets with a current ratio of 0.34.

The redemption of the 2027 notes is scheduled for Thursday at a price equal to 100% of the principal amount plus an applicable "make-whole" premium and accrued interest.

The newly issued notes will pay interest semi-annually on February 1 and August 1, beginning February 1, 2026, at a rate of 5.75% per year. They will mature on August 1, 2032, and will be unsecured with investment grade-style covenants.

"We have completed another successful transaction to continue our accelerated path back to investment grade credit," said David Bernstein, Chief Financial Officer, in the press release.

The company noted it has refinanced nearly $11 billion of debt and prepaid $1.1 billion of debt this year. Carnival has also reduced its secured debt by nearly 70% since its peak in the fourth quarter of 2021.

The notes were offered only to qualified institutional buyers under Rule 144A of the Securities Act and to non-U.S. investors under Regulation S. They are not registered under the Securities Act or state securities laws.

Carnival Corporation & plc operates multiple cruise brands including Carnival Cruise Line, Princess Cruises, Holland America Line, and others.

In other recent news, Carnival Corporation has been active in the debt markets, pricing a $3 billion senior unsecured notes offering. These notes, due in 2032, will help the company repay borrowings and redeem existing notes, aligning with its strategy to manage debt and future maturities. Additionally, Carnival closed a €1.0 billion offering of senior unsecured notes due in 2031, further supporting its efforts to deleverage and simplify its capital structure. The company also launched a $2 billion senior unsecured notes offering, expected to mature in 2032, with proceeds aimed at repaying loans and redeeming a portion of its 2027 notes.

Goldman Sachs recently reiterated its Buy rating on Carnival, emphasizing the company’s sustainable demand growth in cruise travel. The investment bank highlighted Carnival’s focus on high service levels and pricing advantages over land-based alternatives. Goldman Sachs also noted that Carnival is not currently considering mergers and acquisitions, focusing instead on capital returns and deleveraging. These developments indicate Carnival’s ongoing efforts to strengthen its financial position and enhance shareholder value.

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