Carnival prices $1.25 billion of 5.125% senior unsecured notes

MIAMI - Carnival Corporation (NYSE/LSE:CCL; NYSE:CUK), the $38 billion market cap cruise operator with an annual revenue of $26.2 billion, has priced a private offering of $1.25 billion in 5.125% senior unsecured notes due 2029, the cruise company announced Tuesday. According to InvestingPro data, the company maintains a GREAT financial health score despite its debt load.

The company plans to use the proceeds from the offering, along with cash on hand, to redeem $2.0 billion of its 6.000% senior unsecured notes due 2029. This transaction aligns with Carnival’s strategy to reduce interest expenses on its total debt of $27.86 billion. The refinancing comes as the company maintains an EBITDA of nearly $7 billion for the last twelve months.

The new notes will pay interest semi-annually on May 1 and November 1, beginning May 1, 2026, and will mature on May 1, 2029. They will be unsecured and fully guaranteed by Carnival plc and certain subsidiaries that also guarantee the company’s first-priority secured indebtedness and other notes.

According to the company’s statement, the indenture governing the notes will feature investment grade-style covenants. The offering is expected to close on October 15, 2025, subject to customary closing conditions. InvestingPro analysis reveals that while the company’s short-term obligations exceed its liquid assets, with a current ratio of 0.34, it maintains strong operational performance with a 55% gross profit margin.

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

Carnival Corporation & plc operates multiple cruise brands including AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Princess Cruises, and Seabourn.

This information is based on a press release issued by the company.

In other recent news, Carnival Corporation reported third-quarter results that surpassed analyst expectations, with a notable 110 basis point beat on net yields and a 4% EBITDA beat. This strong performance has led Carnival to raise its guidance for 2025. Additionally, Carnival has launched a $1.25 billion notes offering aimed at refinancing debt, which is expected to reduce interest expenses. S&P Global Ratings revised Carnival’s outlook to positive, citing strong bookings and improved financial metrics, affirming its ratings with a ’BB+’ for the new notes offering.

UBS maintained its Buy rating and $33 price target for Carnival, highlighting robust demand and onboard spending. Truist Securities reiterated its Hold rating with a $31 price target following the company’s solid quarterly earnings report, which exceeded expectations in adjusted EBITDA and EPS due to higher ticket revenue and lower expenses. Bernstein SocGen Group continues to rate Carnival as Market Perform with a $26 price target. These recent developments reflect Carnival’s ongoing efforts to strengthen its financial position and capitalize on strong market demand.

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