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MIAMI - Carnival Corporation & plc (NYSE/LSE:CCL; NYSE:CUK) has priced an upsized private offering of $3 billion in senior unsecured notes due 2032, the cruise operator announced Monday.
The 5.75% senior unsecured notes will mature on August 1, 2032, with interest payable semi-annually beginning February 1, 2026. The offering was increased from its initial amount to $3 billion and is expected to close on July 16, subject to customary conditions.
Carnival plans to use the proceeds to fully repay borrowings under its first-priority senior secured term loan facility maturing in 2028. The remaining net proceeds, combined with cash on hand, will be used to redeem $2.4 billion of the company’s 5.75% senior unsecured notes due 2027. This debt restructuring comes as the company maintains a "GREAT" financial health score according to InvestingPro analysis, which offers comprehensive insights through its Pro Research Reports covering 1,400+ top US stocks.
In connection with the pricing, Carnival issued a conditional notice of redemption for the 2027 notes to be redeemed on July 17 at a redemption price equal to 100% of the principal amount, plus an applicable "make-whole" premium and accrued interest.
The transaction continues Carnival’s strategy to reduce debt, manage future maturities, and decrease secured debt. Upon completion, the company’s remaining senior secured debt will be $3.1 billion, all of which has security fall-away provisions upon receiving investment grade ratings from two of three rating agencies. This strategic move is particularly significant given the company’s total debt of $28.65 billion and its impressive revenue growth of nearly 11% over the last twelve months.
The notes will be unsecured and fully guaranteed by Carnival plc and certain subsidiaries. They are being offered only to qualified institutional buyers under Rule 144A and to non-U.S. investors under Regulation S of the Securities Act.
According to the press release statement, the notes will not be registered under the Securities Act or any state securities laws.
In other recent news, Carnival Corporation & plc announced the completion of its €1.0 billion senior unsecured notes offering, with proceeds earmarked for repaying existing loans. This move is part of Carnival’s strategy to reduce debt and manage its capital structure more effectively. Additionally, the company has launched a $2 billion senior unsecured notes offering aimed at refinancing existing debt, contingent upon the offering’s closure. UBS has raised its price target for Carnival to $33, maintaining a Buy rating, citing potential growth catalysts such as yield growth and the opening of Celebration Key. UBS also highlighted the company’s plans to reintroduce a dividend by 2026 and set new long-term targets. Meanwhile, Truist Securities reiterated its Hold rating with a $27 price target, following Carnival’s stronger-than-expected second-quarter earnings. Truist noted that Carnival’s guidance for the latter half of 2025 remains stable despite economic challenges. The firm acknowledged favorable foreign exchange impacts, contributing positively to the company’s outlook.
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