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MIAMI - Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK), the world’s largest cruise operator, has priced a private offering of $1 billion in senior unsecured notes at an interest rate of 5.875%, maturing in 2031. The company plans to use the proceeds to redeem its existing $993 million 7.625% senior unsecured notes due in 2026.
This move is part of Carnival’s ongoing strategy to manage its total debt of $28.4 billion and reduce interest expenses. By redeeming the higher-interest 2026 notes, the company anticipates saving over $20 million in annual net interest expense through the scheduled maturity date of those notes. With an EBITDA of $6.4 billion and improving profitability metrics, InvestingPro analysis shows 8 analysts have revised their earnings upwards for the upcoming period. Earlier this year, Carnival had already partially redeemed $350 million of the 2026 notes.
The new notes, which will pay interest semi-annually, are expected to close on May 21, 2025, with the redemption of the 2026 notes scheduled for the following day, contingent on the closing of the offering. These notes will be unsecured and jointly guaranteed by Carnival plc and certain subsidiaries of both companies.
Carnival’s refinancing efforts come at a time when the travel industry is navigating a complex global environment, with various factors such as geopolitical tensions, pandemics, and economic shifts impacting consumer travel behavior. Despite these challenges, the company has demonstrated resilience with a 53% stock price increase over the past year. Discover more insights and access comprehensive analysis with InvestingPro’s detailed research reports, available for over 1,400 US stocks.
The notes will not be registered under the Securities Act or any state securities laws and are being offered only to qualified institutional buyers and to non-U.S. investors outside the United States. This press release does not serve as a notice of redemption for the 2026 notes.
This financial maneuver aligns with Carnival’s broader financial management practices, aiming to optimize its capital structure and maintain liquidity. The company’s portfolio includes AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Princess Cruises, and Seabourn.
The information reported is based on a press release statement from Carnival Corporation & plc.
In other recent news, Carnival Corporation has announced the redemption of $350 million of its 7.625% senior unsecured notes due in 2026, scheduled for May 1, 2025. This move is part of the company’s strategy to reduce debt and lower interest expenses, reflecting its ongoing efforts to improve financial health following pandemic challenges. Additionally, Fitch Ratings has upgraded Carnival’s Long-Term Issuer Default Rating to ’BB+’ from ’BB’, with a positive outlook, citing strong booking activity and management’s focus on debt reduction as key factors. Fitch expects Carnival’s debt to decline to $27 billion by 2025, down from $35.6 billion in 2022, and forecasts growth in free cash flow. Furthermore, Carnival recently held its annual shareholder meetings, where all board nominees were elected, and all proposed resolutions were approved. Shareholders also ratified the appointment of Deloitte LLP as the independent auditor for Carnival plc and Deloitte & Touche LLP for Carnival Corporation. These developments indicate continued shareholder confidence in Carnival’s management and strategic direction.
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