Carnival Corporation & plc Announces Pricing of
€500 Million 5.75% Senior Unsecured Notes Offering for Refinancing
and Interest Expense Reduction and Successful Repricing of Senior
Secured First Lien Term Loan B Facilities for Interest Expense and
Debt Reduction
Proceeds from the offering of senior unsecured notes
and cash on hand to be used to redeem €500 million 7.625% senior
unsecured notes due 2026; cash on hand to repay $800 million of the term loan
facilities
MIAMI, April 19, 2024 -- Carnival Corporation
& plc (NYSE/LSE: CCL; NYSE: CUK) today announced that
Carnival Corporation (the "Company") priced its private offering
(the "Notes Offering") of €500 million aggregate principal amount
of 5.75% senior unsecured notes due 2030 (the "Notes"). The Company
expects to use the net proceeds from the Notes Offering, together
with cash on hand, to redeem its €500 million 7.625% senior
unsecured notes due 2026 (the "2026
Euro Unsecured Notes"), resulting in a reduction in interest
expense on this outstanding debt of nearly 2%.
In addition, the Company has received commitments from
lenders to reprice its first-priority senior secured term loan
facility maturing in 2028 (the "2028 Secured Term Loan Facility")
and its first-priority senior secured term loan facility maturing
in 2027 (the "2027 Secured Term Loan Facility" and, such
transaction, the "Repricing Transaction"). As part of the Repricing
Transaction, the Company expects to make a partial prepayment of
$500 million under the 2028 Secured
Term Loan Facility and a partial prepayment of $300 million under the 2027 Secured Term Loan
Facility.
The Notes Offering, the redemption of the 2026 Euro Unsecured Notes and the Repricing
Transaction are a continuation of the Company's ongoing debt and
interest expense reduction and capital structure simplification.
Together, the reduction in both interest rates and total debt is
expected to result in a reduction of net interest expense of over
$30 million for the remainder of 2024
and over $50 million on an annualized
basis.
The Notes Offering and Repricing Transaction are expected
to close on April 25, 2024, subject
to customary closing conditions and the execution of definitive
documentation. The previously announced redemption of the
2026 Euro Unsecured Notes is expected
to occur on April 26, 2024 and is
conditioned on the closing of the Notes Offering.
The Notes will pay interest annually on January 15 of each year, beginning on
January 15, 2025, at a rate of 5.75%
per year. The Notes will be unsecured and will mature on
January 15, 2030. The Notes will be
fully and unconditionally guaranteed on an unsecured basis, jointly
and severally, by Carnival plc and certain of the Company's and
Carnival plc's subsidiaries that also guarantee our first-priority
secured indebtedness, certain of our other unsecured notes and our
convertible notes.
After implementation of the repricing, the 2028 Secured
Term Loan Facility will bear interest at a rate per annum equal to
SOFR with a 0.75% floor, plus a margin equal to 2.75%. The 2027
Secured Term Loan Facility will bear interest at a rate per annum
equal to SOFR with a 0.75% floor, plus a margin equal to
2.75%.
PJT Partners is serving as independent financial advisor
to Carnival Corporation & plc.
This press release does not constitute a notice of
redemption with respect to the 2026
Euro Unsecured Notes.
The Notes are being offered only to persons reasonably
believed to be qualified institutional buyers in reliance on Rule
144A under the Securities Act of 1933, as amended (the "Securities
Act"), and outside the United
States, only to non-U.S. investors pursuant to Regulation S
under the Securities Act.
The Notes will not be registered under the Securities Act
or any state securities laws and may not be offered or sold in
the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state
laws.
This press release shall not constitute an offer to sell
or the solicitation of an offer to purchase the Notes or any other
securities and shall not constitute an offer, solicitation or sale
in any state or jurisdiction in which such offering, solicitation
or sale would be unlawful.
About Carnival Corporation &
plc
Carnival Corporation & plc is the largest global
cruise company, and among the largest leisure travel companies,
with a portfolio of world-class cruise lines - AIDA Cruises,
Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line,
P&O Cruises (Australia),
P&O Cruises (UK), Princess Cruises, and Seabourn.
Cautionary Note Concerning Forward-Looking
Statements
Carnival Corporation and Carnival plc and their respective
subsidiaries are referred to collectively in this press release, as
"Carnival Corporation & plc," "our," "us" and "we." Some of the
statements, estimates or projections contained in this press
release are "forward-looking statements" that involve risks,
uncertainties and assumptions with respect to us, including some
statements concerning the financing transactions described herein,
future results, operations, outlooks, plans, goals, reputation,
cash flows, liquidity and other events which have not yet occurred.
These statements are intended to qualify for the safe harbors from
liability provided by Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts are statements
that could be deemed forward-looking. These statements are based on
current expectations, estimates, forecasts and projections about
our business and the industry in which we operate and the beliefs
and assumptions of our management. We have tried, whenever
possible, to identify these statements by using words like "will,"
"may," "could," "should," "would," "believe," "depends," "expect,"
"goal," "aspiration," "anticipate," "forecast," "project,"
"future," "intend," "plan," "estimate," "target," "indicate,"
"outlook," and similar expressions of future intent or the negative
of such terms.
Forward-looking statements include those statements that
relate to our outlook and financial position including, but not
limited to, statements regarding:
• Pricing |
• Adjusted net income
(loss) |
• Booking
levels |
• Adjusted
EBITDA |
• Occupancy |
• Adjusted earnings
per share |
• Interest, tax and
fuel expenses |
• Adjusted free cash
flow |
• Currency exchange
rates |
• Net per
diems |
• Goodwill, ship and
trademark fair values |
• Net
yields |
• Liquidity and credit
ratings |
• Adjusted cruise
costs per ALBD |
• Investment grade
leverage metrics |
• Adjusted cruise
costs excluding fuel per ALBD |
• Estimates of ship
depreciable lives and residual values |
• Adjusted return on
invested capital |
• The transactions
described herein |
|
Because forward-looking statements involve risks and
uncertainties, there are many factors that could cause our actual
results, performance or achievements to differ materially from
those expressed or implied by our forward-looking statements. This
note contains important cautionary statements of the known factors
that we consider could materially affect the accuracy of our
forward-looking statements and adversely affect our business,
results of operations and financial position. Additionally, many of
these risks and uncertainties are currently, and in the future may
continue to be, amplified by our substantial debt balance incurred
during the pause of our guest cruise operations. There may be
additional risks that we consider immaterial or which are unknown.
These factors include, but are not limited to, the
following:
- Events and conditions around the world, including
geopolitical uncertainty, war and other military actions,
inflation, higher fuel prices, higher interest rates and other
general concerns impacting the ability or desire of people to
travel have led, and may in the future lead, to a decline in demand
for cruises as well as negative impacts to our operating costs and
profitability.
- Pandemics have in the past and may in the future have a
significant negative impact on our financial condition and
operations.
- Incidents concerning our ships, guests or the cruise
industry have in the past and may, in the future, negatively impact
the satisfaction of our guests and crew and lead to reputational
damage.
- Changes in and non-compliance with laws and regulations
under which we operate, such as those relating to health,
environment, safety and security, data privacy and protection,
anti-money laundering, anti-corruption, economic sanctions, trade
protection, labor and employment, and tax may be costly and have in
the past and may, in the future, lead to litigation, enforcement
actions, fines, penalties and reputational
damage.
- Factors associated with climate change, including
evolving and increasing regulations, increasing global concern
about climate change and the shift in climate conscious consumerism
and stakeholder scrutiny, and increasing frequency and/or severity
of adverse weather conditions could adversely affect our
business.
- Inability to meet or achieve our targets, goals,
aspirations, initiatives, and our public statements and disclosures
regarding them, including those that are related to sustainability
matters, may expose us to risks that may adversely impact our
business.
- Breaches in data security and lapses in data privacy as
well as disruptions and other damages to our principal offices,
information technology operations and system networks and failure
to keep pace with developments in technology may adversely impact
our business operations, the satisfaction of our guests and crew
and may lead to reputational damage.
- The loss of key team members, our inability to recruit or
retain qualified shoreside and shipboard team members and increased
labor costs could have an adverse effect on our business and
results of operations.
- Increases in fuel prices, changes in the types of fuel
consumed and availability of fuel supply may adversely impact our
scheduled itineraries and costs.
- We rely on supply chain vendors who are integral to the
operations of our businesses. These vendors and service providers
may be unable to deliver on their commitments, which could
negatively impact our business.
- Fluctuations in foreign currency exchange rates may
adversely impact our financial results.
- Overcapacity and competition in the cruise and land-based
vacation industry may negatively impact our cruise sales, pricing
and destination options.
- Inability to implement our shipbuilding programs and ship
repairs, maintenance and refurbishments may adversely impact our
business operations and the satisfaction of our
guests.
- We require a significant amount of cash to service our
debt and sustain our operations. Our ability to generate cash
depends on many factors, including those beyond our control, and we
may not be able to generate cash required to service our debt and
sustain our operations.
- Our substantial debt could adversely affect our financial
health and operating flexibility.
- The risk factors included in Carnival Corporation's and
Carnival plc's Annual Report on Form 10-K filed with the SEC on
January 26, 2024 and Carnival
Corporation's and Carnival plc's Quarterly Report on Form 10-Q
filed with the SEC on March 27,
2024.
The ordering of the risk factors set forth above is not
intended to reflect our indication of priority or
likelihood.
Forward-looking statements should not be relied upon as a
prediction of actual results. Subject to any continuing obligations
under applicable law or any relevant stock exchange rules, we
expressly disclaim any obligation to disseminate, after the date of
this document, any updates or revisions to any such forward-looking
statements to reflect any change in expectations or events,
conditions or circumstances on which any such statements are
based.
Forward-looking and other statements in this document may
also address our sustainability progress, plans, and goals
(including climate change and environmental-related matters). In
addition, historical, current, and forward-looking sustainability-
and climate-related statements may be based on standards and tools
for measuring progress that are still developing, internal controls
and processes that continue to evolve, and assumptions and
predictions that are subject to change in the future and may not be
generally shared.
SOURCE Carnival Corporation & plc
CONTACT: Media, Jody Venturoni, Carnival Corporation,
jventuroni@carnival.com, (469) 797-6380; Investor Relations,
Beth Roberts, Carnival
Corporation, eroberts@carnival.com, (305) 406-4832