Carnival concludes private offering, reprices senior notes

26th Apr 2024 08:18

(Sharecast News) - Carnival announced on Friday that it has concluded its private offering of €500m in 5.75% senior unsecured notes, due 2030.

The FTSE 250 cruise giant said the net proceeds, in combination with existing cash reserves, would be used to redeem €500m 7.625% senior unsecured notes due 2026.

It said that redemption, scheduled for Friday, after fulfilling redemption conditions, would lead to a nearly 2% reduction in interest expense.

Carnival said it had also finalised the repricing of around $1.75bn of first-priority senior secured term loans under its 2028 secured term loan facility, and about $1bn of such loans under its 2027 secured term loan facility.

That transaction also involved partial prepayments of $500m under the 2028 facility and $300m under the 2027 facility.

Carnival said the initiatives formed part of its ongoing strategy for debt reduction and interest expense management.

The combined effect of reducing interest rates and total debt was expected to cause a net interest expense reduction of over $30m for the rest of 2024, and over $50m on an annualised basis.

It said the newly-issued notes would pay interest annually, starting 15 January 2025, at a rate of 5.75% per year, maturing on 15 January 2030.

They would be unsecured and guaranteed by Carnival and certain subsidiaries, similar to its existing obligations.

The repriced loans under the repricing transaction would bear interest based on the secured overnight financing rate (SOFR) with a 0.75% floor, plus a margin of 2.75%, maturing in 2028 and 2027 respectively.

Reporting by Josh White for Sharecast.com.